The point in an English property transaction when buyer and seller swap signed contracts and the deal becomes legally binding — before this point either party can withdraw without penalty.
Exchange of contracts is the most critical moment in an English and Welsh property purchase. Up until this point either party can withdraw without legal penalty (though they lose the costs spent on solicitors, surveys, and searches). From exchange onwards, both sides are legally bound to complete.
At exchange the buyer pays a deposit — typically 10% of the purchase price — which is held by the seller's solicitor. If the buyer pulls out after exchange, the seller keeps the deposit. If the seller pulls out, the buyer can sue for the deposit and potentially for additional losses.
Exchange is carried out by solicitors over the telephone using a Law Society protocol (typically Formula B or Formula C). Each solicitor reads from the agreed contract, confirms the terms match, then both solicitors date their respective copies simultaneously and post them to each other.
The completion date is fixed at exchange — it is written into the contract. Common gaps between exchange and completion range from one to four weeks for a straightforward transaction. Longer gaps occur in chains or where a new-build has a delayed completion date.
In Scotland the equivalent milestone is conclusion of missives — when the last qualified acceptance of the offer is issued the transaction becomes binding. The Scottish system has no separate exchange and completion; binding commitment happens earlier in the process.
The buyer can serve a notice to complete requiring the seller to complete within 10 working days. If the seller still refuses, the buyer can rescind the contract, recover the deposit, and sue for additional losses.
Yes — "simultaneous exchange and completion" is used in some transactions, particularly remortgages and sales where no chain exists. It is riskier as there is no gap to resolve last-minute problems.
Local authority search, drainage and water search, environmental search, and sometimes a chancel repair search. These reveal planning issues, flood risk, drainage obligations, and contamination that could affect value.
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