When buying your home, one of the critical points that everyone refers to is „contract exchange.” But what is it and why is it important? Whether you are selling or buying, you should not commit to exchanging contracts until you are ready and able to reach a legal conclusion, as there are penalties for late completion or if you do not enter into contracts at all. Contracts contain a completion date, i.e. the date on which the property is acquired by the purchaser. At the time of the exchange of contracts, any necessary down payment must be paid and arrangements must be made for the real estate insurance so that the property is insured from that date. As a general rule, the current insurer covers this new property without a premium until the completion date. When you buy or sell a property, your intermediary talks about „contract exchange.” What does it mean and what exactly does it mean? Once both parties have signed contracts, lawyers will be able to exchange contracts. The buyer`s lawyer normally pays a down payment to the seller`s lawyer at the time of the exchange and this down payment is usually 10% of the purchase price. It is important to know that after the contract replacement, any non-refundable down payment will likely be compromised if the buyer does not leave with the purchase. Under English law, the exchange of contracts is the last step in a house purchase, which comes after a lawyer has carried out all the necessary searches and the terms of the contract have been agreed. As soon as each party has signed the contracts and they have been exchanged, they are mandatory. It is really only if you have a contract to buy (or sell) that you are obliged. Your lawyer should ensure that this does not happen until all the necessary formalities have been completed. He or she will ask you to sign the contract.
It can change without you physically signing if you agree to it, but most of the time, a signature is required. The other party will also sign its copy of the contract. Often, the parties` carriers first exchange contracts over the phone, but then send the signed contract to the other carrier. The „contract exchange” process implies that the seller`s means of transport transmits to the customer the contract signed by the Seller. The buyer`s means of transport does so with the contract signed by the buyer and at the same time pays the down payment by means of transporting the seller, so that the contracts were then „exchanged”. On this date, the sale becomes legally binding for both sellers and buyers. This is a system that is only available under English law and the exchange of contracts can take place several weeks or months after the agreement in principle of an offer to sell. This contrasts with most countries where the sale of houses quickly becomes legally binding.  The exchange of contracts usually lasts between 4 and 8 weeks from the date of the sale agreement. Most contracts to purchase a modern property are no more than one standard piece of double-sided A4 paper with the names of the parties, the title number and the purchase price included.
However, background work during transportation may take longer. On March 21, 2017, the Company entered into the Forbearance Reinstatement Agreement (FRA) and an Exchange Agreement (NEA) with the Forbearing Holders. This amount includes (1) the 1,250,000 shares that Mr. Bentivoglio acquired under the share exchange agreement and (2) the 187,500 shares held by EPHS, Inc. I will explain this with regard to the sale of your property, but it is exactly the same if you buy. If you need help buying or selling your home, please contact our team who will help and guide you through the transportation process.