If you’re buying a house or selling a property, exchanging contracts is an important milestone in the process.
It’s the point where the transaction becomes legally binding, giving both parties greater certainty that the sale will go ahead.
But what happens at this stage, and what do you need in place beforehand? In this guide, we explain everything you need to know, including what happens prior to, during, and after the exchange of contracts.
What Does Exchange of Contracts Mean?
An exchange of contracts is when the buyer and seller sign their contracts, which are then formally swapped between their conveyancers. This is when the agreement becomes legally binding.
Before this, neither party is legally committed to completing the transaction, meaning either the buyer or seller can withdraw without being liable for the financial consequences.
Once contracts have been exchanged, however, both parties are legally bound to the transaction. Withdrawing after this point can have serious financial and legal consequences. For example, a buyer could lose their deposit, while a seller could face legal action from the buyer.
It also marks the point at which practices such as gazumping (a seller accepting a higher offer from another buyer) and gazundering (a buyer reducing their offer at the last minute) are no longer possible.
Explore what these terms, and a host of others, mean in our conveyancing jargon buster.
Pulling out after exchange can happen, but it’s extremely rare. Reaching this stage means you can have greater peace of mind that your purchase or sale will complete.
How Does Exchange of Contracts Work?
The exchange of contracts happens between conveyancers, not between the buyer and seller directly. Once it’s done, you’re legally committed with no cooling-off period.
Here’s how it plays out, step by step:
- Final checks are confirmed: Your conveyancer makes sure funds have cleared, buildings insurance is arranged, and any outstanding queries are answered.
- Contracts are read aloud: Both conveyancers read the contracts to each other over the phone. The call is recorded to check every word matches exactly.
- Signed contracts are exchanged: If everything is identical, the conveyancers immediately post the signed copies to one another — the actual “exchange.” This usually happens mid-morning, generally between 10 am and midday.
- Your deposit is released: Typically, 10% of the purchase price is sent to the seller’s conveyancer.
- The completion date is fixed: The date you get the keys is now locked into the contract and can’t be changed without both parties agreeing.
- You’re now liable: You’re now responsible for the property, meaning buildings insurance needs to already be in place.
Completion usually takes place a few days to a couple of weeks after, though it’s possible to exchange and complete on the same day.
If you’re part of a property chain, the process gets a little more complicated. Your conveyancer won’t release contracts until everyone involved is ready to exchange, so a delay anywhere in the transaction can hold all parties up.
Approaching exchange of contracts? Our conveyancing team can help make sure everything is in place and guide you through the final steps towards completion.
What Do You Need Before Exchanging Contracts?
Before you can exchange contracts, there are several important steps to complete.
The exact requirements can vary depending on your circumstances, but making sure everything is in place can help prevent delays.
Here’s what buyers and sellers should have ready before reaching this stage.
Buyers
Mortgage offer
If you’re using a mortgage to purchase the property, you’ll need a formal written offer from your lender.
Deposit
Your deposit should be ready to transfer to your conveyancer. This is usually 10% of the purchase price, although the amount can vary depending on the circumstances of the transaction.
Property searches
Your conveyancer should have received and reviewed the necessary property searches before contracts are exchanged.
Valuation and surveys
Your lender’s mortgage valuation should have been completed, along with any additional surveys you’ve chosen to arrange.
Buildings insurance
You’ll need buildings insurance in place from the date of exchange, as you become legally responsible for the property at this point.
For a full step-by-step breakdown, read our guide to the house buying journey.
H3: Sellers
Property paperwork and forms
Your conveyancer will need all the relevant information and completed forms about the property to progress the sale.
Repairs and survey issues
If you’ve agreed to carry out any repairs or address issues raised during the survey, these should be resolved or agreed with the buyer before exchange.
Fixtures and fittings
Confirm which fixtures, fittings, and other items are included in the sale. Make sure these are recorded clearly so both parties know what will remain at the property.
For more on preparing your property for sale, see our guide to selling your home.
Both buyers and sellers
Signed documents
Both parties will need to sign the relevant legal documents, including the contract. Depending on the documents and circumstances, signatures may need to be witnessed.
H4: Completion date
A completion date should be agreed between the buyer and seller before contracts are exchanged. This is the date when the remaining purchase money is paid and ownership of the property transfers to the buyer.
Final checks
Before exchange, both parties should raise and resolve any outstanding questions or concerns through their conveyancers. Once contracts are swapped, the agreement becomes legally binding, so it’s important to make sure you’re happy with the terms.
Checklist: What you need to do before exchanging contracts
We put this handy checklist together to help you keep track of everything you need to do before exchanging contracts.
The colour-coding signifies which party, the buyer, seller or both, needs to complete the relevant task.
| Ready before exchange | Buyer (✓/✗) |
Seller (✓/✗) |
|---|---|---|
| Mortgage offer | ||
| Deposit | ||
| Property searches reviewed | ||
| Valuation & surveys | ||
| Buildings insurance arranged | ||
| Property paperwork & forms | ||
| Repairs/survey issues resolved | ||
| Fixtures & fittings confirmed | ||
| Signed documents |
What Happens After an Exchange of Contracts?
Once contracts have been exchanged, your purchase or sale is legally binding, and you can start making final preparations for moving day.
The deposit is paid, the completion date is confirmed, and, if you’re buying, your buildings insurance should now be in place.
You can now finalise your moving arrangements and let your utility providers, council tax office, and the Post Office know about your move.
Then, it’s time for the final countdown — this is the moment you can finally collect your keys and move into your new home!
What Is the Difference Between Exchange of Contracts and Completion?
The exchange of contracts makes a property sale or purchase legally binding, while completion is when the remaining money is transferred, ownership of the property changes hands, and the buyer can collect the keys.
Exchange and completion can happen on the same day, but this is typically avoided where possible because it carries greater financial risk. While it can speed up the process, there’s no buffer between the two stages if something goes wrong, which can make moving day more stressful.
Get a Conveyancing Quote Today
If you’re ready to take the next step with your property purchase or sale, our experienced conveyancing team can help guide you through the legal process, from exchange of contracts through to completion.
Get a personalised conveyancing quote today and find out how we can help make your move as straightforward as possible.
Or, for more information about the conveyancing and home-buying processes, explore the following guides on our blog:
- What Searches Are Done When Buying A House?
- What Are Covenants?
- 10 Questions To Ask At A Property Viewing
Frequently Asked Questions About Exchanging Contracts
How long does it take to exchange contracts?
It can take around 8 to 12 weeks to reach the point where you’re ready to exchange contracts. However, the exact timeframe can vary depending on factors such as the property chain, searches, and how quickly the necessary paperwork is completed.
Is exchange of contracts legally binding?
Once contracts have been exchanged, the property transaction becomes legally binding. The buyer will usually pay their deposit to their conveyancer, and a completion date will be agreed.
Neither the buyer nor seller can normally withdraw from the transaction without facing financial and legal consequences. For buyers, withdrawing could mean losing their deposit and potentially being liable for additional costs. For sellers, the buyer may be able to take legal action for breach of contract and seek to recover certain losses and legal costs.
How long between exchange and completion?
The typical gap between exchange and completion is around 1 to 2 weeks, although this can vary depending on the circumstances of the sale or purchase.
This gives everyone time to make final arrangements, such as booking a removal company, packing belongings, and ensuring the necessary funds are ready.
Exchange and completion can occasionally take place on the same day, particularly if there is no property chain. However, as mentioned above, this leaves little time to organise the move and deal with any unexpected issues.
What can delay exchange of contracts?
Several legal, financial, and practical issues can delay the exchange of contracts. Some of the most common include:
- Issues or concerns raised by a property survey
- Problems with the deposit or funds not being ready
- Delays in receiving a formal mortgage offer
- Missing or incomplete documents
- Delays with property searches or survey results
- Another buyer or seller in the property chain pulling out
Can you exchange and complete on the same day?
It is legally possible to exchange and complete on the same day, often referred to as a simultaneous exchange and completion. However, it requires everything to be aligned beforehand, as there is little time to resolve any unexpected issues.
Your conveyancer will need to have completed all necessary legal checks and searches, with any mortgage arrangements and paperwork finalised in advance. Once both conveyancers exchange contracts, the transaction becomes legally binding, and the buyer’s funds can be transferred. The buyer can then collect the keys and move into the property.
This approach can work well for chain-free purchases (e.g., first-time buyers), cash buyers, new-build properties, and some buy-to-let purchases, where there may be fewer complications.
H3: What deposit do I pay at exchange of contracts?
The standard exchange deposit is usually 10% of the property’s purchase price. However, the amount can vary depending on the circumstances of the transaction and what has been agreed between the buyer and seller. For example, if you’re buying with a high loan-to-value mortgage, you may only have a 5% deposit available.
