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How do I exchange contracts?

Exchanging contracts is exciting – that property you were viewing becomes yours. But, exchanging contracts can be tricky. Our guide explains how to ensure it is as stress free as possible

Why do we exchange contracts?

Until you exchange contracts, neither side has any legal obligation to buy or sell the property, and both can pull out without any penalty (or only the deposit on agreeing offers, if one was made). Both buyer and seller sign identical contracts, but only when they are formally exchanged by the solicitors does the deal become legally binding. Between exchanging contracts and completion, either side will almost certainly pay major penalties if they pull out. However, it is extremely rare for anyone to pull out after exchanging contracts, and in practical terms, this is when you can breathe a sigh of relief – you can be pretty sure your house sale will go through.

Only when contracts are formally exchanged does the sale and purchase become legally binding

When do I exchange contracts?

You usually exchange contracts between 7 and 28 days before completion – although you can exchange contracts on the day of completion (see below). Because exchanging contracts means you are legally committed to buying the property, you have to make sure you have everything in place before hand, so that nothing can go wrong. You should only exchange contracts after:

  • You have agreed on an offer, including for fixtures and fittings
  • You have had the mortgage valuation and any surveys you want
  • You have been formally offered a mortgage in writing
  • You have arranged funding for the mortgage deposit
  • Your solicitor has done all relevant searches
  • You have organised building insurance. After you exchange contracts, you are liable for the property, and so you need to have buildings insurance in place before hand
  • You have sorted out funding for the contract deposit (traditionally 10% of the purchase price, but nowadays often less)
  • You have agreed on a date of completion for the sale, which will be written into the contract
  • You have read, understood and signed the contract

Once you have done these things you will agree on a date and time to exchange contracts – usually at midday on any given day. If you have one, your solicitor or conveyancer will exchange contracts for you.

Can I exchange and complete on the same day?

It is possible, increasingly common, and has certain advantages – it certainly speeds the process up, and means you don’t have to pay a deposit on exchange of contracts. However, there are downsides – it is incredibly stressful, and you don’t definitely know that you are moving until the day that you move, which makes arranging removals men and forwarding post more complex. If anything does go wrong, you don’t have any time to put things right. You will need to have your house packed up with the removals men ready, while you are waiting to hear that contracts are being exchanged. If you are keen to go for this, the things to consider are:

  • It is much less riskier if you and the seller are chain-free, so there is no one else to mess things up
  • It is easier if you are a cash purchaser, so you don’t have to worry about transferring money from the mortgage lender
  • Some mortgage lenders are happy with exchanging and completing on the same day, but others require a minimum period (such as five working days) between
  • You and the mortgage lender should transfer the funds to your solicitor the day before, to ensure there are no money transmission problems
  • You are making yourself more vulnerable to an unscrupulous seller demanding something extra at the last moment, as you will be all packed up and ready to go, and not really in a position to negotiate

How do I exchange contracts?

This is usually done by both solicitors/conveyancers reading out the contracts over the phone (which is recorded) to make sure the contracts are identical, and then immediately sending them to one another in the post.

If you are in a chain, your solicitor/conveyancer will do the same thing, but will only release it if all the other people in the chain are happy to go ahead. This means if one person pulls out or delays, everything gets held up. Click here to find out how to break the housing chain.

Once you have exchanged contracts you will be in a legally binding contract to buy the property. If you do not you will lose your deposit and you can be sued. Equally though, the seller has to sell or you can keep their deposit and sue them.

What happens after exchanging contracts?

Reaching the exchange of contracts is the difficult part – after that it should be relatively plain sailing. The next big step is completion – when you take possession of the property and can move in – but there are various things you should do before hand:

  • Final checks – you and your estate agent should visit the property just before you complete the sale to ensure that all the fixtures and fittings you agreed on are in place and that nothing has been damaged in the meantime
  • Send a copy of the title deeds to your mortgage lender who will hold them until you pay your loan off
  • Notify the freeholder if the property is leasehold.
  • Register the transfer of ownership with the land registry
  • Tell utility companies that it is now your property
  • Tell any banks that you have moved
  • Change your address on your driving license (Free)
  • Organise post forwarding

To find out more about what to expect on completion day, see our guide

The HomeOwners Alliance provides members with guidance on buying and selling their homes. To see how we can help, find out more about the benefits of joining the HomeOwners Alliance.

 


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26 Comments

  1. We are close to exchanging but our vendor will be on holiday (I assume abroad) on the suggested completion day and has suggested just before or just after. We can do just after but our buyer has jumped the gun (before any completion date was confirmed) and booked leave for the (unconfirmed) suggested day and says he can’t do it any other time!

    We have asked (via solicitors) if our vendor could accommodate the original suggested date (he took possession of a new property some weeks ago) but wonder if it matters whether or not he is in the country on the day of completion.

    Comment by Steve Skinner — September 22, 2016 @ 4:56 pm

  2. Dear Geoff,

    Thank you for your query. This would be a matter that you should speak to your solicitor about. The Power of Attorney in place would have been restricted to the named property and a new power of attorney would need to be created for the new address. Your solicitor will be able to advise you whether an original signed hard copy is needed or whether an electronic version will do. Given the importance of the document maybe the solicitor will say that he does need you to come home and sign it in person.

    Best of luck with it and please do have a look at our buying guides as well: HOA Step-by-Step Guide to Buying a Home

    Kind regards,

    Sophie
    HomeOwners Alliance Team

    Comment by Sophie Khan — September 13, 2016 @ 1:09 pm

  3. Hi,
    My wife and myself are in the process of moving to a new house. I work overseas and as such handed power of attorney to a friend. The house we were buying fell through after I left for work and my wife has subsequently found another. She has been advised that my POA no longer applies to this new address and that I will have to return home to complete. Is there a solution to this that does not involve me having to fly home? I’m at sea at the time of writing but should be able to get documents home if an electronic form were to be sent for example.

    Thanks in advance, Geoff Thomas

    Comment by Geoff — September 3, 2016 @ 6:27 pm

  4. we are in the process off moving house and our solicitor as asked us for a copy of our building insurance for the new property but they cant give us a moving in date ,our insurance company say they cant insure our house till we have a moving in date ,any advice would be appreciated .

    Comment by shane hamilton — July 30, 2016 @ 6:38 am

  5. Am I allowed to put flooring and lighting into a property after I exchange contracts or must I wait until I complete before this can happen. Also We have a lot of pot plants to move and would like to know if we can put them in the new garden as it would cost a fortune to move them on the day

    Comment by Mr Elliott — April 5, 2016 @ 4:48 pm

  6. we have exchanged contracts but no completion date as yet can the buyers pull out still at this stage

    Comment by billy mair — February 27, 2016 @ 9:28 pm

  7. Hello
    I am due to complete on a flat tomorrow on a buy to let basis and keeping the same tenant on. The tenant currently pays the seller 1 month in advance on the 4th of each month. I asked my solicitor how I will be getting paid rent for the period covering the 26th January 2016 and 4th February 2016. When checked with the seller, the seller has refused to pay part of the rent.

    Now exchange has already happened, completion takes place tomorrow, what can I do?

    Comment by Indi — January 25, 2016 @ 10:45 pm

  8. Hi Miriam

    If you have completed on the property it’s yours, there’s no turning back. However if there is an issue with anything you feel should have been noted at disclosure talk to your lawyer. Alternatively put it back on the market, but you may suffer a loss. Hope it gets better for you.

    Comment by Lindy — December 6, 2015 @ 7:13 pm

  9. Hello,

    We are about to exchange on a leasehold property but the agreed completion date will not be for another 6 weeks. The property needs some maintenance work which we would like to have done before we move in. Are we within our rights to organise the work to be done (via the freeholder/managing agent) before completion occurs?

    Comment by Nina — October 19, 2015 @ 7:33 pm

  10. can someone please answer my question dated 23rd &27th Sept

    Comment by Brian — September 28, 2015 @ 9:20 am

  11. Hi,

    I’m looking for some advice, i have currently moved into a property that i was buying but on a 6 month rental agreement, this was due to my house being sold, and needed to vacate but once i had moved in the buyers pulled out of my house due to some unanswered questions on the contract leave myself in a predicament. But fortunately the vendor of the vendor of the purchase house said if we exchange contracts only until my property is sold which means leaving the completion date open!!!! Is this allowed?

    Comment by Danny — September 28, 2015 @ 8:33 am

  12. rian on September 23, 2015 at 8:15 pm
    The person i’m buying the house from is also the builder who is renovating the property.In order to meet the completion date the buyer of my house and their buyer ( who is a cash buyer) want, my seller (the builder) needs extra cash to pay a much larger work force in order to get the job done by completion date. Can a sum of money be released to him at the exchange of contracts date.
    – See more at: http://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/how-do-i-exchange-contracts/#comment-300541

    Comment by Brian — September 27, 2015 @ 5:48 pm

  13. The person i’m buying the house from is also the builder who is renovating the property.In order to meet the completion date the buyer of my house and their buyer ( who is a cash buyer) want, my seller (the builder) needs extra cash to pay a much larger work force in order to get the job done by completion date. Can a sum of money be released to him at the exchange of contracts date.

    Comment by Brian — September 23, 2015 @ 8:15 pm

  14. We have received the final account statement from our conveyancing solicitors we asked they pay balance into our adult sons account, at the last minute they say they could not do this due to money laundering furthermore although they advised a cheque for the balance would be sent with the final statement so we have still not received the final balance, 10 days will have passed still no cheque. when we receive the final balance cheque can i pay this directly into my sons account?
    Thank you. Sincerely,

    Comment by Graham — July 3, 2015 @ 4:56 pm

  15. Hi

    I am a first time buyer and am in the process of buying a property. I feel like my solicitor has been very very slow with the procedure of the purchase and have had many issues but have already paid full legal fees to this man. The day I went to sign the contract for the property I was contacted by the mortgage lender who made me aware they now need a full structural report of the property which was detailed in the valuation report and when making this clear to my solicitor he told me to ignore it as he has contacted the mortgage lender and they have agreed to release the funds. The solicitor made me aware (after signing my contact) that we will be due to complete 2 days later so I have paid my full deposit to the solicitor. On the day of completion I have tried to call my solicitor and his assistant made me aware we will now complete in 2 weeks. I have waited those 2 weeks and have called the solicitor AGAIN and he now told me that the mortgage lender will not release the funds after I already made him aware of this issue. I finally arranged the structural review and everything was looking well and now the seller is making me aware that they want to pull out of the sale as they are making a loss (I have already signed my contract). My question is from a legal point of view were do I stand as I have wasted thousands on a useless solicitor and now may have nothing to show for it? I have signed my contact but am not 100% if they seller has signed theirs.

    Thank you

    Comment by Af — June 3, 2015 @ 9:59 pm

  16. Hiya 🙂 In a situation of a new build, following exchange and completion, can the builder then tell owners they cannot move in because the flooring or plumbing is not done? What does ‘complete’ actually mean in legal terms?

    Comment by ivyclark — April 25, 2015 @ 3:41 pm

  17. Hi we are buying a house and we are renting at the moment. The seller is moving into rented accommodation. We are ready to exchange and complete but the seller has now advised she has nowhere to rent yet. There are plenty of properties accepting dss but she isn’t sorting anything. our mortgage offer expires soon what can we do

    Comment by sel Wilkinson — March 2, 2015 @ 11:17 pm

  18. Hi,

    My partner and I have just bought our first property – a flat. We completed on Monday morning, and moved our things in straight away.
    The noise from other both adjoining flats is almost unbearable, we’ve spent two nights there and it’s just driving us insane – last night it was only quiet between 3am and 6.45am, a combination of a loud television, a party, dogs, and a child! We don’t know what to do. I appreciate that it takes some time to get used to the new noises, but this is ridiculous.

    Is there any way we can back out of it now?

    Comment by Miriam — February 25, 2015 @ 1:35 pm

  19. Hi,

    My boyfriend has exchanged contracts for a new development. The developers have not given us a completion date. They first said Nov 2014 then moved it to Dec and after the blackmailed us to put the property on back the market if we don’t exchange contracts and promised thar we will be able to move in by mid January. My boyfriend transfered contracts and now the developers ate not even answering the phone to put some light on when we can move in. We are currently homeless (living with family and friends) and I am 8-months pregnant. We are panicking and almost depressed now as we can’t buy anything for the baby as all our things are in the storage and we don’t know what we are going to do. Can you give us any advice. We feel hopeless now especially they’ve got the our money and not even talking to us.

    Comment by Emma — January 9, 2015 @ 7:07 pm

  20. Hi have been turned down for a small mortgage we have a large deposit because the house we were buying was built over an old railway tunnel and station. However they have been occupied as a working garage and were for some years.
    But 2yrs ago the tunnels collapsed although not through to houses residents were
    evacuated for 18mths. They have been fixed and made safe and returned to their homes.

    I have put in another offer nearby which has been accepted but when plans came back for this house it showed the tunnel running not directly under the house but 3 doors away

    waiting now to hear if mortgage will be offered
    or refused again. Oh and do you think we should get a surveyor too although it’s built in 1930, s its been renovated to a very high standard and we are totally broke.

    Thanks

    Comment by Diane Furlong — November 6, 2014 @ 8:18 am

  21. We are in the process of purchasing an empty house that has been vacant for a month since the tenants moved out.

    At present, we have only viewed the house with the estate agent present.

    Once we have exchanged, are we able to ask the estate agent for an unsupervised viewing, where we can do some cleaning etc?

    Also, presently, there is lots of “stuff” in the house. We have requested that the house is fully empty on completion. Where do we stand legally if this doesn’t happen?

    Comment by Vicki Reilly — September 15, 2014 @ 12:04 pm

  22. I completed on the sale of my flat on Thursday. The solicitor said my money would be in on Friday, but nothing. Conveniently there was a bank holiday on Monday so 6 days later and still no payment from the sale of my parent. It is also coming close to the end of the month. Is this normal?

    Comment by Sarah — August 25, 2014 @ 8:14 pm

  23. i am a buyer,we did exchanged contract 4 weeks ago and completion date is another 4 weeks later. right now housing price is rising everyday,if seller refuse to do completion then what can i do

    Comment by aj — May 24, 2014 @ 12:42 am

  24. Hello
    We are in the position to exchange and complete with in one week, but the seller is still in the process with other house that they are purchasing, so they want more time, we are desperate to move as my husband starting his job there in one week and our contact has come to an end at the current property, to top it all up we have a new born baby. Any suggestions, do We really have to wait until they want us to?! I’m so stressed , it can take months isn’t. Thank you

    Comment by Kris — May 16, 2014 @ 5:18 pm

  25. My buyer signed contracts two weeks ago, I am still waiting to sign and exchange, will this delay be due to him part buying the property with a mortgage? All this waiting to exchange seems to be dragging out, is this normal that I haven’t signed yet.

    Comment by Gail — May 8, 2014 @ 9:04 am

  26. I am in the process of buying a property and my solicitor has asked for a deposit on exchange of contracts. When will i get this back or does it get deducted from the total price?!

    Comment by sarah — January 30, 2014 @ 10:18 pm

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