Exchange of contracts is the moment a property sale becomes legally binding. Completion is the last day when the money is transferred, the buyer becomes the legal owner, and the keys are released. Exchange always comes first. The completion date is fixed at exchange and is often a week or two later, though both can happen on the same day.
Exchange vs completion at a glance
| Exchange of contracts | Completion | |
|---|---|---|
| What it means | The buyer and seller become legally bound. | Ownership passes to the buyer. |
| Money that moves | The buyer’s deposit | The rest of the price, including mortgage funds |
| Who does it? | The two conveyancers usually communicate by phone. | The conveyancers, by bank transfer |
| Keys | Not released | Released once the seller’s conveyancer confirms the money has arrived |
| Can you pull out? | Only at a serious cost (see below) | The sale is finished. |
| Insurance | The buyer should have building insurance from this day. | The buyer is now the owner. |
What happens at the exchange of contracts?
At exchange, the buyer and seller each sign an identical copy of the contract, and their conveyancers swap them. From that moment, the buyer must buy and the seller must sell at the agreed price on the completion date written in the contract.
You don’t need to be there. Your conveyancer handles exchange for you, usually by phone. The two conveyancers read the contracts to each other to confirm that every detail matches. They then date the contracts and agree to post them that day. The call is recorded and follows procedures set by the Law Society, so it is as binding as a meeting in person.
On the day, you only need to stay reachable. Your conveyancer will ring or email you for final permission before exchanging, and that is the last chance to raise a question.
What does your conveyancer check before the exchange?
Your conveyancer should normally ensure that the key legal checks and agreed enquiries have been addressed before exchange. Buyers must also decide whether they are satisfied with their survey and other matters.
If you’re buying, your conveyancer will usually confirm that:
- The property searches are back, and any problems they raised have been dealt with
- The seller has answered the enquiries raised about the property and its title
- Your mortgage offer has been issued, and its conditions can be met
- Your deposit is ready, and the source of your funds has been checked
- You have signed the contract and the mortgage deed
- Building insurance is arranged to start on the day of exchange
- You are happy with the survey and the agreed completion date
If you’re selling, your conveyancer will usually:
- Prepare the contract and the property information forms
- Get a redemption figure from your mortgage lender so the sale price covers what you owe
- Have you signed the contract and the transfer deed
- Agree on the completion date with you and the buyer’s side
How much deposit do you pay on exchange?
The buyer pays the deposit on exchange. The Law Society’s standard contract terms set it at 10% of the price, but a lower deposit, often 5%, is commonly agreed. Your conveyancer holds the money and sends it to the seller’s conveyancer at exchange.
If you’re in a chain, the buyer of your home can often pass the deposit up the chain towards your own purchase. That means you may not need to find the deposit from savings. Ask your conveyancer early whether this option applies to you and what it means for the seller’s agreement.
Can you withdraw after the exchange?
Yes, but it is expensive, whichever side you’re on.
If the buyer pulls out after exchange, they are in breach of contract. Under the standard terms, the seller can usually keep the deposit and may also claim further losses, such as the cost of reselling.
If the seller pulls out after exchange, they are also in breach. The buyer can claim their losses, get their deposit back, and, in some cases, ask a court to order the seller to complete.
Before exchange, either side can walk away for any reason without legal penalty. That is why most problems surface and are fixed before this point.
How does exchange work in a property chain?
In a chain, everyone must exchange on the same day and agree on the same completion date. Otherwise, one person could end up committed to buying without a sale or to selling without a home to move to.
The conveyancers usually exchange in sequence, from one end of the chain to the other, often within a few hours. Each conveyancer releases their contract to the next only when the link before them is secure. The whole chain has been exchanged once the last link is confirmed. One person who isn’t ready, such as a buyer still waiting for a mortgage offer, holds up everyone.
How long is there between exchange and completion?
There is no fixed gap. The completion date is agreed upon by everyone involved and written into the contract at exchange. A week or two is common because it allows the buyer’s lender time to release the mortgage money and gives everyone a chance to book removals.
A longer gap suits sellers who need time to find somewhere to go or buyers waiting for a tenancy to end. A shorter gap suits people who want to move quickly and are confident nothing will go wrong.
Can you exchange and complete on the same day?
Yes. This is called simultaneous exchange and completion. It is most common with cash buyers, new-build purchases and short chains, and it is also possible in longer chains.
The trade-off is risk. Until exchange, anyone can still pull out, so you could book removals and pack, only to find on the day that someone further up the chain has withdrawn. Most conveyancers recommend a gap unless there is a good reason not to have one.
Do you need building insurance between exchange and completion?
If you’re buying with a mortgage, almost certainly yes. Most lenders require building insurance to be in place from the day of exchange, and some will not release the mortgage money without proof of it.
Even a cash buyer should think hard before going without. Once you have exchanged, you are committed to buying, so any damage between exchange and completion is your problem as well as the seller’s. Your conveyancer can tell you what your contract says about who bears that risk. Set your policy to start on the exchange date, not the completion date.
What happens on completion day?
Completion day is when the rest of the money moves and the buyer becomes the owner. You don’t need to do anything except wait for your conveyancer’s call and, if you’re the buyer, collect the keys.
If you’re buying, your conveyancer will:
- Receive the mortgage money from your lender, plus any balance from you
- Send the full purchase money to the seller’s conveyancer by bank transfer
- Tell you when the keys are ready
If you’re selling, your conveyancer will:
- Confirm the buyer’s money has arrived
- Tell the estate agent to release the keys
- Pay off your mortgage, the estate agent’s fee and any other agreed bills
- Send you the balance
What time does completion happen, and when do you receive the keys?
There is no fixed time, and it can be any time after the money arrives. Under the Law Society’s standard contract terms, the money is due by 2pm on completion day unless the contract says otherwise. If it arrives later, the buyer may have to pay compensation for the delay.
In a chain, money often has to pass through several firms before it reaches the top, so completion can fall later in the day. The seller should have moved out by the time it happens. Keys are released by the estate agent or handed over by the seller once the seller’s conveyancer confirms the money is in.
What can go wrong between exchange and completion?
Most exchanges complete on time. When they don’t, these are the usual reasons:
- Late money. Bank transfers in a busy chain can be slow, or a lender can release funds late. Most delays of this kind last hours, not days.
- This is a problem in the chain. If one buyer’s money doesn’t arrive, nobody above them can complete either.
- A mortgage issue. Lenders rarely withdraw an offer after exchange, but it can happen, for example, if your circumstances change or the property is damaged.
- The other side can’t complete. If a buyer or seller simply isn’t ready on the day, the other side can claim compensation for the delay.
If completion is late, the ready side can serve a notice to complete. Under the standard contract terms, the notice gives the late party ten working days to finish the sale. If they still don’t, the other side can end the contract, keep or recover the deposit and claim their losses. Conveyancers usually talk first and serve a notice only when a delay looks likely to run on.
If keys can’t be released on the day, the seller sometimes agrees to let the buyer store belongings at the property or move in early. That needs written agreement and the lender’s consent, so speak to your conveyancer before agreeing on anything.
What happens after completion?
The sale is done, but a few legal steps remain, and your conveyancer handles them.
First, they file your property tax return and pay the tax from the money you sent. In England, the Stamp Duty Land Tax return must reach HMRC within 14 days of completion. In Wales, the Land Transaction Tax return must be submitted to the Welsh Revenue Authority within 30 days of the day after completion. A return is usually needed even if no tax is due.
Next, they register you as the new owner with HM Land Registry. For sellers, they confirm with your lender that the old mortgage has been paid off and removed from the title.
Checklist for exchange and completion
- Get building insurance quotes before exchange, and start the policy on the exchange date
- Keep your phone on and check email on exchange day
- Book removals as soon as the completion date is fixed, not before
- Give meter readings to your energy suppliers on completion day
- Tell your council, broadband provider and water company your moving date
- Sellers: leave the keys with the estate agent and any agreed fixtures in place
- Buyers: check the property against the fixtures and fittings form when you get in
Get a fixed-fee conveyancing quote
Our fees are fixed, so you know the cost before you start. Call or get an online quote and a conveyancer will reply within a few hours.
This guide is general information about the process in England and Wales, not legal advice for your situation. Speak to your conveyancer about your transaction.