What Is Exchange of Contracts?

Exchange of contracts is one of the most significant moments in any property transaction. It’s the point of no return — after this, the sale is legally binding on both sides. Here’s exactly what it means and what happens.

What exchange actually is

When contracts “exchange”, both the buyer’s and seller’s solicitors swap signed copies of the sale contract. At the same moment, the buyer’s deposit (typically 10% of the purchase price) is transferred to the seller’s solicitor. From this point, both parties are legally committed to completing the sale.

Before exchange, either side can walk away with no legal penalty (though you might lose survey or legal fees). After exchange, if the buyer pulls out, they lose their deposit. If the seller pulls out, the buyer can sue for damages and potentially force the sale through court.

What needs to happen before exchange

Exchange can only happen once everything is in place. That means: searches are complete and clear, all enquiries raised by your conveyancer have been answered satisfactorily, your mortgage offer has been formally issued by your lender, buildings insurance is in place (lenders require this from exchange), you’ve agreed a completion date with the other side, and both parties have signed their copies of the contract.

In practice, exchange often happens suddenly — after weeks of waiting, things align and it can happen on the same day you’re told it’s ready. Don’t be alarmed by that. It’s normal.

The deposit

The deposit at exchange is usually 10% of the purchase price. If you’re using a 5% or 10% mortgage deposit, your conveyancer will need to discuss this with the other side — you may be able to negotiate a lower exchange deposit to match your actual deposit amount. This is common and usually agreed without issue.

The deposit is held by the seller’s solicitor until completion. If the seller defaults, you get it back. If you default, they keep it.

The completion date

Exchange and completion can happen on the same day (called simultaneous exchange and completion), but this is unusual and risky — it leaves no room for last-minute problems. More commonly, they’re separated by one to four weeks, giving both sides time to organise removals, final utility readings, and anything else that needs to happen before moving day.

The completion date is agreed by both sides before exchange. Once set, it’s locked in — changing it after exchange requires agreement from everyone in the chain and can incur costs.

What happens on completion day

On completion day, the remaining purchase money (the full price minus your deposit) is transferred from your lender and your solicitor to the seller’s solicitor. Once the money arrives and the seller’s solicitor confirms receipt, the keys are released — usually via the estate agent. The property is legally yours.

Your solicitor then registers you as the new owner at the Land Registry and pays any stamp duty owed on your behalf.

Why the gap between exchange and completion matters

Once you’ve exchanged, you’re legally committed — but you don’t own the property yet. If something happened to the property between exchange and completion (a fire, flood, or other damage), you could be in a complicated position. Make sure buildings insurance starts from exchange, not completion.

Also: don’t hand in your notice, cancel your rental agreement, or book a removal company before exchange. Up until that point, the sale isn’t binding, and deals do fall through. After exchange, you’re safe to make those plans.

On Woosh

On Woosh, your transaction timeline shows exactly where you are in the process — including when exchange is approaching and what’s outstanding before it can happen. No guessing, no chasing your solicitor for updates.

Learn more at wooshproperty.com