What Happens at Exchange of Contracts? A Step-by-Step Guide to Exchange and Completion

Exchange of contracts is the moment a house sale or purchase becomes legally binding in England and Wales. Until then, either side can walk away. At exchange, the buyer’s and seller’s conveyancers each hold a signed copy of the same contract, agree a completion date, formally “exchange” by telephone, and the buyer’s deposit (usually 10% of the price) is sent to the seller’s conveyancer. From that point neither party can pull out without serious financial consequences. Completion, when the balance is paid and you get the keys, commonly follows one to two weeks later, although it can be the same day or several weeks away depending on what is agreed.

What happens at exchange of contracts?

Exchange is a short, formal step carried out by the conveyancers, not by the buyer and seller themselves:

1. Everything is ready. Your conveyancer will only exchange once searches and enquiries are satisfactory, the mortgage offer has been issued and checked, both sides have approved the contract, you have signed it, your deposit has cleared into your conveyancer’s client account and buildings insurance can start from exchange.
2. A completion date is agreed by buyer, seller and everyone else in the chain, and written into the contract.
3. The conveyancers exchange by telephone. A contract for the sale of land must be in writing and signed by each party (Law of Property (Miscellaneous Provisions) Act 1989, section 2). Each conveyancer holds their own client’s signed part and they exchange using one of the Law Society’s formulae, usually “Formula B”, noting the time of the call and posting the contracts afterwards.
4. The deposit is paid to the seller’s conveyancer on the day of exchange.
5. You are told it has happened and the completion date is confirmed in writing.

What time of day does exchange of contracts happen, and how long does it take?

There is no fixed time. Exchange happens during office hours, once every conveyancer in the chain has confirmed they are ready. The call itself takes a few minutes, but in a chain each link has to be released in turn, so you may be told “we are exchanging today” in the morning and not hear confirmation until the afternoon. If one party is not ready, exchange slips to another day for everyone.

Is exchange of contracts legally binding? Can a buyer or seller pull out afterwards?

Yes, exchange binds both sides, and neither can simply change their mind. If a party fails to complete on the agreed date, the other can serve a “notice to complete” under the Standard Conditions of Sale, giving ten working days to complete and making time of the essence. If the buyer still does not complete, the seller can end the contract, keep the deposit with any interest, resell and claim compensation for any loss. If the seller fails to complete, the buyer can end the contract, recover the deposit with interest and claim compensation. Interest at the contract rate is also payable by whoever is responsible for a delay. This is why your conveyancer will not exchange until they are satisfied you can go ahead.

Who holds the deposit on exchange of contracts?

Under the Standard Conditions of Sale the deposit is normally 10% of the price and is held by the seller’s conveyancer as “stakeholder”, so it cannot be released to the seller before completion. The main exception is that a seller who is also buying may use the deposit they receive as the deposit on their own related purchase in England and Wales, which is how deposits usually travel up a chain. A reduced deposit (for example 5%) is sometimes negotiated, but the contract usually still entitles the seller to the balance of the full 10% if the buyer defaults, so ask your conveyancer to explain this before agreeing to it.

What can hold up exchange of contracts?

Exchange is where every loose end must be tied up, so it is where delays become visible. The usual causes are a mortgage offer that has not been issued, has outstanding conditions or is close to expiring; searches or replies to enquiries still outstanding, or raising a point that needs an indemnity policy or missing certificates; on a leasehold property, a management pack that has not arrived; identity, anti-money-laundering and source-of-funds checks, including paperwork for a gifted deposit; a signed contract or cleared deposit that has not reached your conveyancer; or another party in the chain that is not ready. Returning forms promptly, chasing your lender and having your deposit in place early are the things most within your control.

What happens between exchange and completion?

After exchange your conveyancer carries out the pre-completion work that makes the transfer possible on the day:

1. Pre-completion searches. The buyer’s conveyancer makes an official search with priority at HM Land Registry (form OS1). This protects your purchase for 30 working days so that nothing can be registered against the title ahead of it, provided your application is lodged within that period. If you have a mortgage, a bankruptcy search is also made for the lender.
2. Requesting the mortgage money. A certificate of title goes to the lender asking for the advance to arrive the working day before completion. Lenders generally need at least several working days’ notice, which is one reason a very short gap between exchange and completion can be difficult.
3. The transfer deed. The transfer (form TR1) is prepared and signed, ready to be dated on completion.
4. Completion statement and funds. You receive a statement showing the balance to send, including stamp duty land tax, Land Registry fees and your conveyancer’s fees and disbursements, which must be in your conveyancer’s account in cleared funds before completion day. The seller’s conveyancer obtains a redemption figure from the seller’s lender and agrees key arrangements with the estate agent.
5. Practical steps. Book removals, arrange meter readings and do not plan to collect keys until your conveyancer confirms completion has taken place.

How long after exchange of contracts is completion?

The gap is whatever the parties agree and write into the contract. If no date is agreed, the Standard Conditions of Sale provide a default of 20 working days after exchange, but a date is almost always set. One to two weeks is common, giving time for mortgage funds to be requested and removals booked. Same-day exchange and completion is possible, usually where there is no chain or no mortgage, but it means you have no binding commitment from the other side until the day you move. Longer gaps, for example on a new build that completes “on notice” from the developer, are also common. These are typical ranges only; your conveyancer can tell you what is realistic for your transaction.

On completion day the contract normally requires completion by 2.00pm. The buyer’s conveyancer sends the balance to the seller’s conveyancer, who confirms receipt, repays the seller’s mortgage and authorises the estate agent to release the keys. If the money arrives after the contractual time, completion is treated as taking place on the next working day for the purposes of interest, even if keys are handed over that afternoon.

Frequently asked questions

Can you pull out of a house sale before exchange?

Yes. Before exchange there is no binding contract, so either side can withdraw for any reason, and a seller can accept a higher offer from someone else (“gazumping”). The only loss is the money already spent on searches, surveys and legal work, which is why most people push to exchange as soon as everything is ready.

Can a mortgage offer be withdrawn after exchange of contracts?

Not often, but a lender can withdraw, and you would still be bound by the contract. Check the expiry date before exchange, tell your conveyancer about any change in your job or finances, and avoid new borrowing between exchange and completion.

Do I need buildings insurance from exchange?

Yes. Under the Standard Conditions of Sale the risk in the property passes to the buyer on exchange and the seller has no obligation to keep it insured after that point. If the property were damaged before completion you would still have to complete at the agreed price, so cover should start on the day of exchange. Your lender will also require it.

Gregory Abrams Davidson’s residential conveyancing team acts for buyers and sellers across Liverpool, Wirral and North West London and can explain where your transaction is and what is needed to reach exchange. To talk to a conveyancer about buying or selling a home, please contact us.

Important: This guide is general information, not legal advice. It is based on the sources listed below and reflects the law and practice in England and Wales at the date shown. Every transaction is different, and the process, timescales, costs and requirements can vary depending on your circumstances and the property involved. For advice on your own situation, please contact Gregory Abrams Davidson.

Last reviewed: November 2026