What is exchange of contracts?Exchange of contracts is the point at which the property sale becomes legally binding. Both buyer and seller sign identical copies of the contract, which are then exchanged between solicitors. Once exchange has taken place, neither party can pull out without financial penalty. The buyer pays their deposit (typically 10% of the purchase price) at exchange. Exchange = legally binding. Completion = when you get the keys. Between exchange and completion (typically 1 to 4 weeks), both parties are contractually committed. What is completion?Completion is the final step in the property purchase. On the completion date, your mortgage lender releases the funds to your solicitor, who transfers the full purchase price to the seller solicitor. The seller vacates the property, keys are released (usually via the estate agent), and legal ownership transfers to you. Exchange vs completion: key differences
How long between exchange and completion?The gap between exchange and completion is agreed by both parties. Common timescales are:
What happens between exchange and completion?
What can go wrong between exchange and completion?
Verdict Insure from exchange, not completion The most common mistake buyers make is not insuring the property from exchange. Once contracts are exchanged, you have a legal interest in the property and bear risk if it is damaged or destroyed before completion. Get buildings insurance in place on exchange day. Frequently asked questionsCan you back out after exchange? You can withdraw after exchange but you will forfeit your deposit (typically 10% of the purchase price) and may face a damages claim from the seller for any additional losses they suffer as a result. What happens on completion day? Your solicitor receives the mortgage funds from your lender, transfers the full purchase price to the seller solicitor, and notifies you when to collect the keys — usually from the estate agent. The whole process typically completes by early afternoon. Do I need to be present at exchange or completion? No. Both exchange and completion are handled by solicitors on your behalf. You do not need to attend — your solicitor will call or email you when exchange and completion have occurred. How much deposit do you pay at exchange? Typically 10% of the purchase price. If your deposit is less than 10% (e.g. 5%), your solicitor may need to use a deposit guarantee or negotiate with the seller to accept a lower deposit at exchange. |
Exchange and Completion UK: What Happens and When? 2026
|
|
