What does 'Conditional Exchange' mean when buying a property?
Find out what Conditional Exchange means when you are buying a property. 'What does Conditional Exchange mean?' plus over 150 other property related terms and jargon in plain English
The delay is due to various pieces of paperwork that need to be gathered together such as confirmation that the seller has the right to sell the property, checks on planning applications in the area which may affect the future value, etc, etc and then etc again!
Any of these checks may make you rethink your decision to buy or make you rethink how much you want to buy the property for. Before Exchange of Contracts you have the right to walk away at any time or propose a new price.
Where both the buyer and seller want to be more firmly tied into a property transaction a conditional exchange can be arranged. This is Exchange of Contracts subject to certain terms or events.
At this time the buyer will need to give his solicitor funds for the deposit and should he then pull out of the purchase (unless the conditions of the exchange are not met) he will loose these funds to the seller.
The seller becomes legally bound to sell their property to the buyer if the conditional terms are met.
In reality all exchanges of contracts are conditional as the buyer only pays a percentage deposit at exchange and agrees to pay the balance on the date of completion (when the property legally changes ownership).
So the sale is still conditional on the final payment from the buyer at completion. This is why properties that have exchanged are still referred to as "Sold Subject to Contract".
However the term "Conditional Exchange" is only really used to describe conditions over and above this.
To find out more about how you could use Conditional Exchange in your property purchase pick up a copy of my ebook How to Really Buy a Property.