What happens at exchange of contracts?
Exchange of contracts is the point at which a property sale in England becomes legally binding. The conveyancers confirm identical signed contracts, agree the completion date, and the buyer's deposit, usually up to 10 per cent, is transferred. After exchange, neither party can withdraw without serious financial consequences.
Exchange is the moment the transaction stops being provisional. It is usually anticlimactic: a phone call between two conveyancers reading contracts to each other. What changes is your legal position, and it changes completely.
What has to be in place before exchange?
Your conveyancer will not exchange until everything is settled, because after exchange you are committed.
- Searches returned and reviewed, with any issues resolved.
- All enquiries answered satisfactorily.
- A formal mortgage offer in place, if you are borrowing.
- Signed contract and transfer deed returned to your conveyancer.
- Deposit funds cleared in your conveyancer's client account.
- A completion date agreed by everyone in the chain.
What happens on the day itself?
The conveyancers exchange the two signed contracts, traditionally by a recorded telephone call following a standard formula. The deposit is sent to the seller's solicitor, and the completion date becomes a legal commitment.
In a chain, exchanges have to be synchronised, so the process may take most of the day while each link confirms in turn.
What should you do immediately after exchange?
Buildings insurance is the priority: from exchange, the buyer is generally responsible for insuring the property, even though they do not own it yet. Check your contract and confirm the position with your conveyancer.
Then book removals, confirm time off work, arrange meter readings and notify utilities, schools and your employer of the moving date.
Key takeaway
Exchange makes the sale binding and fixes the completion date. Arrange buildings insurance straight away and treat the completion date as immovable from that point.
Frequently asked questions
What happens if I pull out after exchange?
You would normally lose your deposit and could be liable for the seller's losses. Withdrawal after exchange is a breach of a binding contract, so speak to your conveyancer before taking any action.
How long is it between exchange and completion?
One to two weeks is common in England, but it can be same-day or several weeks by agreement. The gap is negotiated between the parties and needs to work for everyone in the chain.
How much deposit is paid at exchange?
Typically up to 10 per cent of the purchase price, though a lower figure can sometimes be agreed, particularly in a chain. This deposit forms part of the total funds you provide on completion.
Moving day checklist
Exchange starts the countdown. MyMoveMate turns the gap before completion into a checklist covering insurance, removals, meter readings and address changes.
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