Buying or selling a property involves several legal and financial steps, many of which can seem complicated if you are unfamiliar with the process. One important document that appears near the end of a property transaction is the completion statement. While it may look like a simple financial summary, it plays a crucial role in ensuring that the final exchange of money between the buyer, seller, and their solicitors is accurate.
Whether you are purchasing your first home, selling a property, or managing a buy-to-let investment, understanding how a completion statement works can help you avoid confusion on completion day. This guide explains what a completion statement is, what information it includes, and why it matters to both buyers and sellers.
What Is a Completion Statement?
A completion statement is a detailed financial document prepared by a solicitor or conveyancer during a property transaction. It outlines all the money that needs to be paid or received when the property purchase or sale is finalised.
The statement ensures that all costs involved in the transaction are clearly listed and accounted for before the transfer of ownership takes place. It usually includes the property purchase price, legal fees, taxes, mortgage payments, and any adjustments related to the property.
Both buyers and sellers receive a completion statement from their respective solicitors. Each document reflects the financial responsibilities of that particular party in the transaction.
Why Completion Statements Are Important
Completion statements are essential because they provide a clear breakdown of the financial aspects of the transaction. Without this document, it would be difficult for buyers and sellers to confirm that all payments have been calculated correctly.
The statement also ensures transparency. It allows everyone involved in the transaction—including solicitors, mortgage lenders, and estate agents—to verify that the correct amounts are being transferred.
For buyers, it clarifies exactly how much money must be paid before completion. For sellers, it shows how much they will receive after outstanding mortgages, fees, and other costs have been deducted.
What Information Is Included in a Completion Statement?
Although the format can vary slightly between solicitors, most completion statements include several key details.
Purchase or Sale Price
The property price agreed between the buyer and seller is usually the starting point of the completion statement. This figure represents the main amount being transferred during the transaction.
Deposit Paid
For buyers, the statement will usually show the deposit already paid at the exchange of contracts. This amount is deducted from the remaining balance due on completion.
Mortgage Funds
If the buyer is using a mortgage, the lender typically sends the funds directly to the solicitor before completion. The completion statement will show the amount provided by the lender and how it contributes to the final payment.
Legal and Conveyancing Fees
Solicitors and conveyancers charge fees for handling the legal work involved in buying or selling a property. These costs are clearly listed on the completion statement so that both parties can see exactly what they are paying.
Stamp Duty Land Tax (SDLT)
For buyers in England and Northern Ireland, Stamp Duty Land Tax is often included in the completion statement. The solicitor collects the tax payment from the buyer and submits it to the government after completion.
Estate Agent Fees
For sellers, estate agent fees are usually deducted from the sale proceeds and shown on the completion statement. This ensures that the correct amount is transferred to the agent once the transaction is complete.
Outstanding Mortgage Balance
If the seller has an existing mortgage on the property, the outstanding balance will be included in the completion statement. The solicitor arranges for this amount to be repaid to the lender from the sale proceeds.
Additional Adjustments
Other adjustments may also appear on the completion statement. These could include items such as ground rent, service charges, or council tax payments that need to be apportioned between the buyer and seller.
When Do Buyers and Sellers Receive the Completion Statement?
Completion statements are typically provided shortly before the completion date. This allows buyers and sellers to review the financial details and ensure everything is correct before the final transfer of funds.
For buyers, the statement confirms the exact amount they must transfer to their solicitor before completion. This usually needs to be paid a few days in advance so that the solicitor can send the funds to the seller’s solicitor on completion day.
Sellers receive a statement showing how the proceeds from the sale will be distributed. This includes deductions for mortgages, legal fees, and estate agent costs.
Common Questions About Completion Statements
Many buyers and sellers have questions when they first receive a completion statement. Understanding a few common points can help make the process clearer.
Why Do Figures Sometimes Change?
It is not unusual for completion statements to be updated more than once before completion. Small adjustments may occur as final costs are confirmed or if additional charges need to be included.
Solicitors update the statement to ensure the figures are accurate before the transaction is finalised.
What Happens on Completion Day?
On the completion date, the buyer’s solicitor sends the final payment to the seller’s solicitor. Once the funds are received, the seller releases the keys to the property and ownership officially transfers to the buyer.
The completion statement acts as the financial record of this exchange, showing exactly how the funds were distributed.
What Should You Check on Your Completion Statement?
It is always a good idea to review the document carefully. Buyers and sellers should check that the property price, legal fees, taxes, and other costs match what they expect.
If anything appears incorrect or unclear, it is important to raise the issue with your solicitor before completion takes place.
How Completion Statements Fit into the Property Process
The completion statement is one of the final steps in the conveyancing process, which begins when an offer on a property is accepted.
Earlier stages typically include property searches, mortgage approvals, and the exchange of contracts. By the time the completion statement is issued, most legal work has already been completed.
For landlords and property investors, completion statements are also useful records for financial planning and tax purposes. Keeping these documents can help track the costs associated with property transactions.
Property professionals often emphasise the importance of understanding these final steps. In competitive markets, experienced professionals such as letting agents in Chelsea frequently work with buyers, sellers, and investors who benefit from having a clear understanding of the financial aspects of property transactions.
Why Completion Statements Matter for Property Investors
For landlords and investors, completion statements can provide valuable insights into the true cost of acquiring or selling a property.
They highlight the various fees and taxes involved, allowing investors to calculate their overall investment costs more accurately. This information can be useful when assessing potential rental yields or planning future property purchases.
In high-demand areas such as Chelsea, where property prices and transaction costs can be significant, careful financial planning becomes even more important. Many landlords working with letting agents in Chelsea pay close attention to completion statements as part of managing their property portfolios.
Conclusion
A completion statement is a crucial document in any property transaction, providing a clear breakdown of the money being transferred between buyers, sellers, and their solicitors. It ensures transparency, accuracy, and proper accounting of all financial elements involved in the sale or purchase of a property.
By understanding what the completion statement includes and how it fits into the conveyancing process, buyers and sellers can approach completion day with greater confidence. Carefully reviewing the document and asking questions where necessary helps ensure that the transaction proceeds smoothly.
For homeowners, tenants, and investors alike, gaining a clear understanding of documents such as completion statements can make the property buying and selling process far less daunting. With the right knowledge and professional guidance, navigating the final stages of a property transaction becomes much more straightforward.
