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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.

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 are 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

Have a question?  Have something to say? Due to the popularity of this page we have created a forum on  exchange of contracts for advice and to share experiences.

Related Guides

Making an offer – and haggling over the price
What sort of survey should I have?
What type of mortgage should I get?
Conveyancing made easy for buyers
Leasehold v Freehold – what’s the difference?

Other questions? See how our ask an expert service is helping members with their problems 

If you feel you have a problem which requires professional help our Legal Advice Line is the place to go. All members have free access to an experienced solicitor

 


 

 

 


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40 comments on “How do I exchange contracts?

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  1. Hi, I am a seller and we have exchange contracts and set completion date and the estate agency have sent a letter with their commission etc which we have agreed. Two weeks later they send a new ,enter with their new commission twice as much claiming that the property was marketed by other agencies. As they had the sole agency. I have never nor have given any permition to others to market the property. I have made enquiries about the price prior to giving the sole agency to them. I have informed the two agamcies I contacted that the sale its a sole agency the sale of the property . Other agencies apparently have been advertising the property without my knowledge as I was abroad on a regular intervals for long periods. Where do I go from here as I do not wish to pay them double of what it’s been agreed .

  2. Hi
    Just wanted to ask you about the contract itself which we exchanged some time ago. The matter is this contract is with our solicitor at the moment even we already are living in the house. The legal company says this contract wouldl be stored with them. And now when we are having an issue with the Builders of the house, we do not have a document to refer to…
    Can you please give me an advice of what we can do in these circumstances.

  3. Hi Galia. Our view would be it is your contract and therefore you should hold a copy of it. Phone the solicitor and ask for a copy again. Follow-up your phone call with an email to the person you spoke to and their manager, customer services and anyone else at the firm that might help unplug this blockage. For more advice and information, do join us and you can ask expert questions again and again, as well as have access to our free legal helpline.
    Ed, Homeowners Alliance

  4. Hi there,

    Are you able to sell a property after exchanging contracts but before completing?

    I’m particularly interested in the case of new builds where the exchange might be 1 year or more before construction ends & completion.

    Thanks.

  5. Hi Aaron,

    We don’t think you can, as before you complete the purchase you do not own it and you cannot sell what you don’t own. But there may be ways around this – by reaching a conditional sale agreement, where you agree to sell on a property once completion takes place and it is yours to sell. But you need to seek legal advice on this.

    All our members get access to our Legal Advice Line and have the opportunity to ask an expert to get advice tailored to their situation.

    Ed, HomeOwners Alliance,

  6. Hello, we have exhcange contracts today and completion is in 7 days, is this standard practise as we had asked for the deal to be done at the same time but were told the buyers solicitors actually wanted 11 working days in total.

  7. Hi Carl,
    This is normal (in fact 7 – 28 days is standard practice). If you are in a hurry it’s always worth asking for a quick completion but it has to be agreed by both parties. If the buyers are in a chain they may be waiting on other people, hence the slight delay. For more information on exchanging contracts and completion have a look at this guide: http://hoa.org.uk/advice/guides-for-homeowners/i-am-selling-2/step-by-step-guide-to-selling-your-home/
    Ed, HomeOwners Alliance

  8. Hi

    We are in the process of selling our home, the money we are getting from the hoe sale doesn’t cover the amount we owe in total, (e.g mortgage, loan, solis, estate agent) but i have the remaining amount in my bank, is it ok to pay the solicitors the amount we owe or can we not sell, also we are moving into rental accommodation so can we move as soon as the contract are exchanged or should we wait till completion

  9. my mortgage advisor has told me not to tell the mortgage lender that my partner is moving in with me when the sale goes through as it might effect the mortgage with her being at university. I have received a mortgage offer and one of the conditions are that i have to declare anybody over 17yrs old living in the property. what can be done if i don’t tell them she is living there? will the lender take legal action if i am caught lying??

  10. I am selling my current property and purchasing a new build. What would be the longest time allowed to go between exchanging and completing? We are due to exchange in the next week but my new build is not ready until September. Any thoughts??

  11. My daughter and partner are purchasing their first home together – a flat. Contracts have been exchanged, although some outstanding repair work earlier identified has not been completed by the property’s current owner. Furthermore, a date for completion was arranged without proper consultation with my daughter and falls on a date when she and her partner will be abroad. This means after completion, the property will not be occupied for approx one month. I am concerned about this….. should I move some of my daughter’s effects into the flat in her absence? What is the situation with insurance, and the possibility of squatters? Should the company arranging the buildings insurance be advised that after completion the property will be unoccupied for a month? Also, as exchange has taken place, and the repair work not done, is the current occupant of the flat now not obliged to complete it?

  12. Hello,
    We’re in the process of buying a house. The vendors are not able to leave till August 19th. They want us to exchange contracts as soon as possible (in June). Is this too early?

  13. Hi Adil
    Check with your solicitor who should be working to protect your interests. It is usually 28 days at most between exchange and completion and the date has to be agreed by both parties. If the buyers are in a chain they may be waiting on other people, hence the slight delay. For more information on exchanging contracts and completion have a look at this guide: http://hoa.org.uk/advice/guides-for-homeowners/i-am-selling-2/step-by-step-guide-to-selling-your-home
    The HomeOwners Alliance team

  14. Hello Marilyn
    Ultimately your daughter is paying a solicitor to progress the purchase of the property in a way that protects her interests, which includes ensuring works are completed before contracts are exchanged. You will need to follow this up with them. They should also have agreed a mutually convenient completion date which would have saved you these additional concerns over insurance. We understand most insurance policies provide for people to be away for a period of up to 30 days without notifying the insurer, but check your daughter’s policy terms with the insurer.
    For more detailed advice and security in these all important final stages of the process, then join us. Our members benefit from our Ask an Expert service and Legal Advice Line. See here for more details http://hoa.org.uk/join/
    The HomeOwners Alliance Team

  15. We have had an offer accepted on a house, however the vendor’s solicitor has insisted that in order to do so, we release some of our deposit in the solicitor’s escrow account directly to the vendors so they can pay a letting agent to secure a rental property. With bond, rent in advance and agency fees this comes to several thousand pounds.

    Our solicitor advises if we do this, our money is unprotected should something happen between exchange and completion and the vendors withdraw. The only way to obtain the money, if the vendors refused/were unable to pay us back, would be through expensive and lengthy court action. Whilst the risk may be small that this happens, we’ve been advised not to agree to this.

    The vendor’s solicitor insists that they will not exchange unless the vendors have secured a rental property, that letting agents insist on this large sum up-front, and that without our releasing some of the deposit they do not have the funds to pay.

    Do you have any advice on how we should proceed? We love the house and have also spent a great deal of money on the survey and mortgage approval, not to mention the emotional investment, but are really unsure what we should do to break this impasse.

  16. Most property bought for cash are value 10-20% lower than the market value,But there are firms out there would only deducted 10% of the valuation.( It was published in The Daily Mail some 4 months ago).

    But thanx for the great post

  17. We are purchasing a house, no chain ex-rental, tenants have vacated so it stands empty. Once we have exchanged contracts. At the moment if we want to view the house we have to have supervised viewings with the agent (the vendor lives overseas). What is the score once have exchanged contracts? Can we borrow the keys at all to view without agent present. Also are we able to do work to the property between exchange and completion, such as cleaning and/or replacing carpets, putting curtains up etc. Is this advisable or is it best to wait until we complete.

  18. Hi we are due to exchange and complete on 30th August we are still waiting for the valuation to be done which is due to be done at some point this week. is this still a realistic date for exchange and completion?

  19. Hi Kerr.
    I assume by valuation you mean the mortgage valuation carried out by your lender? In which case, get in touch with your lender and ask for an indication of the steps after the valuation has taken place and how long this takes. In my experience, assuming that the valuation doesn’t throw up any issues for the mortgage company which need further investigation, you will then be sent a mortgage deed to sign and send back. So based on what you have told us, 30th August sounds optimistic. But it’s really difficult to comment on cases like this especially without all the information regarding the rest of your chain, and any other possible outstanding issues such as results of your local searches etc. The best person to speak to is your solicitor – they have all the information available so get your moneys worth and ask them for his/her informed view. Best of luck. And keep us posted on how it goes.

  20. Hi, we have exchanged contracts on a property that was being sold by both an estate agent and auction house, we had to act quickly to exchange prior to auction to guarantee purchase so to speak, the property ultimately did not go to auction as it had a lease attached to the freehold so the sellers had to apply to the land registry to have the leasehold removed, they applied on 24th july and we were informed that it would take 15 working days, deadline up today however, it appears that the application is there but not completed, i cannot get any answers as i did not make the application and we were due to complete on Monday? The move is from the mainland to the Isle of wight, it will be very expensive if the completion does not happen.
    Can i do anything?

  21. Hi,

    We’ve paid the deposit for our house to our solicitor today but he says there are still some outstanding issues to resolve before exchange. These have been outstanding for sometime and I’m feeling nervous that we’ve handed over an enormous sum of money without yet having anything to show for it. How long can they keep it for before exchange.

  22. Hi, my boyfriend had recently bought a flat, done exchange and waiting on completion. There are outstanding charges from the council for works 2013/2014 of which his solicitor believes that most of them are already done but not paid for. This issue only got detected at the final stages when we are due to move in in a couple of days. The current owner is away and is not back until another week. Can we still move in the flat before completion? There was an agreement that keys can be picked up from current tenants but now there seem to be other instructions which we are not being made aware. What should we do?

  23. What can you do if the previous owner leaves a lot of belongings behind which would fill a skip? Is there are recourse?

  24. We are in a chain of 4 the solicitors acting for me have told me that we are ready to exchange contracts and all parties agreed on a date then I was told that paperwork was missing at the end of the chain and the agreed date has changed so we agree on another date being last week 2 days before exchange we all found out that no one can get hold of the solicitor at the end of chain now the estate agent representing my sale manage to speak to them and old my solicitor nothing is ready so we have all been told the new date set for next week won’t happen why do solicitors not talk to one another and why is there always delays and also give wrong information so we are all stuck I am the one moving 4 hours away everyone lose is local and I am to start my new job in a week now that won’t happen help

  25. My wife and I are first time buyers. We made an offer on a property that was subsequently accepted. Seller was anxious to exchange contract within a certain time frame which was exactly 1month after the offer was accepted. We transferred deposit to our solicitor’s account, got mortgage offer, etc. 3weeks later, agent suddenly called to inform us that seller wanted contract exchanged within the next 24hours to secure the property. Our solicitor advised that we should be careful; something told him that the seller and the agent were hatching a plan.

    Our solicitor called the seller’s solicitor to inform him that we were ready to exchange contract but was told to wait. Agent called me 2hours later to say seller wants more money because he had received a better offer from another potential buyer.

    We have invested time, money and emotion on this offer and we are devastated at this point. It seemed my solicitor’s warning was true.

    What do you advice?

  26. Dear Ayo, So sorry to hear of your situation, unfortunately you are not alone as gazumping has now returned. Your options are limited – here is the advice we have given to a member in a similar situation – http://hoa.org.uk/services/ask-an-expert/gazumped/. It is too late for you now, but in the future you could ask for a lockout agreement – but there are risks. See http://hoa.org.uk/services/ask-an-expert/how-do-i-know-third-party-offer-is-real-and-not-the-agent-trying-it-on/

    We are campaigning to change how we buy and sell our homes in the UK – to discourage gazumping, and when it does occur, we believe the buyer should get their costs refunded as well as compensation. One suggestion is to make it legally binding that the seller has to pay the buyers’ costs if they decide on a higher offer after acceptance. Another option could be for both parties to put aside a non-refundable deposit. We would love to hear of other ideas, and in particular what happens in other countries.

    HomeOwners Alliance

  27. We are buying a property from a vendor who has had to apply for probate for his late mothers estate. As son as probate has been granted we are ready to exchange. However we would like to visit my husbands family, who live abroad. Do we have to actually sign the. Contract on exchange day. It’s been 30 years since we bought a house & technology has moved on, I hope.

  28. Hi,
    My partner and I are first time buyers and have found a house we both love. Our offer has been accepted and surveys etc have been completed, the only stumbling point for us is the current owners of the house we are purchasing from are waiting for their new house to be built. We were made aware of this and have been told the completion date for their house will be November, however, after viewing their house ( just bricks and mortar) we are becoming increasingly worried that the house will not be completed by this date. My question is, is there anyway in which we can have the current owners relocated to rented accomodation (at the expence of the company building their house) if the house isnt built by the date we were first told. Any advice or help on this would be great thanks in advance.

  29. Hi my wife and i have bought a house in ross on wye surveys are done so we are ready because this house needs lots of work the sale of our present house will make us morgage free we have the buyers of our house survey being done next week how long will it be after that day we could move .as i said we are ready but they seem to be dragging there heels, many thanks john

  30. Hello,

    I am in the process of selling my house and buying another. I sold through an agency wherby an upfront fee is paid. I have had telephone calls and texts from the buyer stating that she wants to talk to me. She has had searches done on my property and a valuation. Her solictor has not yet contacted my solicitor but we are near to completion, just waiting for a valuation on the proerty we are buying which is vacant. I texted the buyer to ask her to direct questions to my solicitor and she has contacted the agent who has rung me to say she wants to ask me questions the solicitor cannot answer and wants to measure up to buy items for the house. I dont think its a good idea to converse directly as contracts have not been agreed. My agent thinks I should speak to the buyer. She now says she wants a 3rd viewing to measure up etc. Is this wise when contract are being negotiated?

  31. Hi my partner and I are first time buyers and this is completely new to us; we are due to exchange on a new build on 29/11/13 but the build hasn’t even started yet with not even an estimated completion date the only thing we know is that it should be completed between April- June would they be expecting our deposit this early on in the process? Thank you and kind regards.

  32. Hi we are in the ‘end of chain’ position (a chain of 3 we believe) we affirmed the ability to exchange and then complete on a specified day 19th Dec, and then set about looking for a local rental property. Solicitors confirmed that completion was still targeted for the 19th so we committed to a rental commencing 14th Dec (giving time to make the move) having been assured that all parties were progressing well. On the 16th Dec we were contacted by Solicitor and Selling Agent requesting that the completion date be set back to 20th Dec (which was still achievable and to be honest gave us an extra day to finish off the packing and cleaning). On the morning of the 18th Solicitor confirmed all was on track, all the financial stuff had been confirmed (we even had the financial statement), however later that same day we received an email from our solicitors advising that our buyer’s buyer had an issue with their lender and consequently couldn’t complete in time for us on the 20th Dec, the next best date was sometime in Jan 2014.

    No idea what the issue was but if it had been known and if serious beforehand it would have been nice to have known – before we committed funds to rental.

    Now we have the interesting problem of half of our belongings in our old property and the other half in the rental … Christmas is now complicated – and can we get hold of solicitors to discuss options…

    I wonder what issues can pop up at the eleventh hour that can cause this type of delay… we acknowledge that things can happen… and sometimes it is unavoidable… but my buyer was enthusiastic about purchasing our property and we are left in limbo whilst an unknown issue is addressed by a third member of the chain (surely most client/lender stuff would have been sorted out at the early stages ??)

    Oh well – looks like an interesting period…

    Advice always welcome.

  33. 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?!

  34. 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.

  35. 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

  36. 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

  37. 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?

  38. 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?

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