If you’re selling a house or a flat, you might be wondering who signs the contract first. After all, the process of selling a house is different in the UK than it is in other countries. In most cases, it’s the seller who signs the contract first. Here’s a closer look at why that is and what it means for you.
Also read: What happens after exchange of contracts
Why the Seller Signs First
When selling a house and a flat, the seller always signs the contract first. This may seem strange to those who are used to the conventional wisdom of signing a purchase contract only after all negotiations are complete. However, there are several very good reasons for this custom.
The most important reason for the seller signing first is that it protects the buyer’s deposit. In most cases, the deposit is paid at the time of signing the contract. If the seller were to back out of the deal after the buyer has paid their deposit, they would be in breach of contract and would be required to return the deposit plus any other reasonable expenses incurred by the buyer.
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Another reason for the seller signing first is that it helps to avoid last-minute problems with financing. If the buyer’s financing falls through after they have already signed the contract, they may be able to back out of the deal without penalty. However, if the seller has already signed, they would be obligated to sell the property to the buyer even if financing fell through. This protects buyers from sellers who might otherwise try to back out of a deal if they receive a better offer from another buyer.
Lastly, by signing first, sellers are indicating their confidence in the deal and their willingness to move forward with it. This can often help to remove any final hesitation on the part of the buyer and pave the way for a smooth and speedy transaction.
Also read: The Legal Stages of Selling a House
While it may seem counter intuitive, there are several very good reasons why sellers sign contracts first when selling property in the United Kingdom. The most important reason is that it protects buyers’ deposits in case something happens to fall through on the sellers’ end. It also helps to avoid last-minute problems with financing and indicates that sellers are confident in moving forward with the deal, which can often help seal things up on buyers’ ends as well.
Also read: How to find a solicitor for buying a house
What This Means for You
As a result of this process, sellers need to have a solicitor who can check over the contract before they sign it. This way, they can be sure that they are not inadvertently agreeing to something that could be disadvantageous to them further down the line. For example, some contracts may contain clauses that allow the buyer to back out of the deal if they are not happy with the condition of the property upon completion of their surveys. While this may seem like a good idea at the time, it could come back to bite you if the buyers decide to pull out at the last minute, leaving you high and dry.
It is also worth noting that, in Scotland, things are done slightly differently and it is the buyers who sign first. This is because in Scotland there is a period (known as ‘missives’) between exchanging contracts and completing the sale during which either party can back out without penalty. As such, it is seen as more binding for the buyers to sign first so that they cannot simply walk away from the deal if they happen to change their minds.
Also read: How to Choose a Good Conveyancing Solicitor
How to make sure you’re prepared before signing a contract to sell your house
There are a few things that you need to do before you can sign a contract to sell your house or a flat. Here are four tips to make sure that you’re prepared before signing on the dotted line.
1. Get your paperwork in order
The first thing that you need to do before you can sell your house is to get your paperwork in order. This includes things like your mortgage documents, proof of ownership, and any other legal documents that you might need. These will all need to be in order before you can sign a contract to sell your house.
Also read: How are conveyancing fees calculated?
2. Find a good estate agent
One of the most important things that you can do when selling your house is to find a good estate agent. A good estate agent will be able to help you with the paperwork, marketing your property, and dealing with potential buyers. They will also be able to give you advice on how to get the best price for your property.
3. Check your finances
Before you sign a contract to sell your house or a flat, you need to make sure that you have checked your finances. This includes things like getting a recent mortgage valuation, checking how much equity you have in your home, and making sure that you can afford the fees associated with selling your property.
Also read: Conveyancing Help For First-Time Buyers
4. Understand the contract
Finally, before you sign a contract to sell your property, you must take the time to read and understand the contract. This includes understanding any deadlines, what happens if the sale falls through, and what your obligations are as the seller. If there is anything in the contract that you don’t understand, make sure to ask your estate agent or solicitor for clarification before signing.
Selling your house is a big decision, but if you’re prepared, it can be a smooth and stress-free process. By getting your paperwork in order, finding a good estate agent, checking your finances, and understanding the contract, you can make sure that everything goes smoothly when selling your property.
Also read: Can Conveyancing Be Done in 3 Weeks?
Conclusion:
In most cases, it’s customary for sellers to sign contracts first when selling houses in the United Kingdom. There are a few reasons for this—including giving sellers more time to review contracts and putting more pressure on them to follow through with sales— but it’s important to keep in mind that once you do sign a contract, you’re legally obligated to sell your property.
