Whether you’re buying your first home or moving up the property ladder, one of the most pivotal stages in any property transaction is the exchange of contracts. It’s the moment where a deal becomes legally binding, bringing relief, excitement, and sometimes a little nervousness, especially when you’re part of a chain.
Understanding exactly how this process works, how long it takes, and what to expect, particularly in a chain, can help you stay in control and avoid unnecessary delays. In this guide, we’ll walk you through everything you need to know about exchanging contracts, from the legal basics to completion day and all the common questions in between.
Related: How long does it take to exchange contracts on a house?
What does exchanging contracts mean?
Exchanging contracts is the point in the process when both buyer and seller sign identical contracts and formally agree to the terms of the sale. This makes the transaction legally binding. The contract outlines key details, such as the agreed price, property boundaries, any fixtures and fittings included, restrictions on the land, and the intended completion date. Before this point, either party can withdraw without legal consequences.
Why do I need to exchange contracts?
This stage gives both sides certainty and security. Once contracts are exchanged, neither the buyer nor the seller can back out without facing penalties. For buyers, it’s also the moment mortgage lenders will release funds. For everyone involved, it means there is now a fixed completion date, which helps with planning the move and managing expectations within a property chain.
Who exchanges contracts?
Solicitors or licensed conveyancers representing both the buyer and seller are responsible for exchanging contracts. After all legal checks are completed and both parties are satisfied, the solicitors speak on the phone to confirm the agreement. This conversation constitutes the legal exchange and is typically recorded or formally documented.
Related: What does a conveyancer do?
When do I exchange contracts?
Exchange occurs when all key milestones have been met. These include having a confirmed mortgage offer, completed legal searches and enquiries, satisfactory survey results, agreement on what’s included in the sale, and the deposit transferred to the buyer’s solicitor. Everyone in the chain must be ready before contracts can be exchanged, which is why the process sometimes takes longer in chain transactions.
How long is it between exchange and completion?
Typically, there’s a gap of one to two weeks between exchange and completion. This period allows time to finalise moving arrangements, organise removals, transfer remaining funds, and take out buildings insurance. That said, the timeline can vary depending on personal circumstances and the complexity of the chain.
Related: Seller’s guide to selling a house in England & Wales
What happens when you exchange contracts?
Once contracts are exchanged, the agreement becomes legally binding. The buyer’s solicitor sends the deposit to the seller’s solicitor, and all parties commit to the agreed completion date. Buyers should arrange buildings insurance immediately, as they are now responsible for the property, even if they haven’t moved in yet.
What does completion mean?
Completion is the final step in the transaction. It’s the day when ownership of the property officially transfers from seller to buyer. Funds are transferred via the solicitors, and the estate agent is notified to release the keys. From that point, the buyer legally owns the property.
What happens on completion day?
On completion day, mortgage funds are transferred from the lender to the seller via the solicitors. Once this happens, the buyer can collect the keys from the estate agent and move in. Everyone in a chain usually completes on the same day, so timings must be coordinated to avoid delays.
Can exchanging contracts and completion happen on the same day?
Yes, though it’s less common. Same-day exchange and completion are typically used when there’s no chain or if all parties are ready and prefer to speed things up. While it can be convenient, it does leave little time to make arrangements, so it’s important to be well prepared if you take this route.
Related: Your 6-Step Guide to the Conveyancing Process
What can delay the exchange of contracts?
Several factors can hold up exchange. These include outstanding legal queries, missing documents, delays in receiving mortgage offers, or issues raised during the survey. In a chain, delays in one part of the process can impact everyone, which is why preparation and communication are so important.
How much does exchanging contracts cost?
There is no separate cost for exchanging contracts, but this is the point where the buyer’s deposit is paid, usually 10% of the property price. Other costs associated with the transaction include solicitor fees, search and survey charges, and mortgage arrangement fees, many of which will have been paid earlier in the process.
Related: What is conveyancing
Are you at the beginning of your buying or selling journey?
Whether you’re buying your first home or navigating a complex property chain, Belvoir’s experienced agents and trusted partners are here to guide you every step of the way. From listing to legal support, we’ll help you move forward smoothly and securely.
Get in touch with your local Belvoir office today to speak to one of our property experts and start your journey with confidence.
