Exchange of Contracts – What Does This Mean?

Up until exchange, either party can pull out of the deal without penalty. However, once the contracts have been exchanged by the solicitors – each holding their respective client’s signed copy -neither side can back out without facing legal and financial consequences.

At the point of exchange, a completion date is formally agreed, which is typically two weeks later although can take place on the same day as exchange. The timeline can vary depending on the circumstances of the sale and the property chain.

The completion date is when the buyer will pay the remaining balance and the keys will be handed over.

On exchange, the buyer is usually required to pay a deposit, typically 10% of the purchase price. If the buyer withdraws after this point, they risk losing the deposit and may be sued for breach of contract. Similarly, if the seller pulls out, they can be forced to pay damages.

It is crucial that all surveys, mortgage offers, and legal checks are completed before exchange. Your solicitor will also ensure that any issues with the title, boundaries, or local searches are resolved. Once everything is in place, they’ll confirm that you’re ready to proceed and seek authority from you to exchange.