Discover what the exchange of contracts means for your house move.
What is the exchange of contracts?
In England and Wales, exchange of contracts is one of the last stages of buying a house.
It’s the point where you sign a contact agreeing to buy a house and the seller signs a contract agreeing to sell the house to you. Then your conveyancers “exchange” these contracts. This is the stage when you’ll pay your deposit.
By signing the contracts, you’re committed by law to buying the property. Once the contracts have been exchanged, the buyer and seller can’t back out.
The exchange can only happen once your deposit is in place and ready to go. By this stage, you’ll have approval for your mortgage.
How does exchange of contracts and completion work?
The exchange of contracts will be handled by your solicitor. Before the exchange can happen, you’ll need to make sure of the following:
The lender’s valuation has been carried out
You have a mortgage offer from your lender
You’ve agreed what’s included in your offer (fixtures and fittings, furniture)
You’ve signed your copy of the contract
Your solicitor has transferred your deposit
Once that’s all done, you can exchange contracts. If you’re buying a house, this is the exciting bit. You’ll be given a moving in date shortly after this point.
You will need to arrange buildings insurance for your new home before the exchange of contracts. This covers against the cost of damage to your new home from things like fires and floods.
How long does it take to exchange contracts?
It usually takes around eight to 12 weeks to reach the point where you’re ready to exchange contracts. The actual process is quite speedy, requiring a phone call between the buyer’s and seller’s solicitors.
What happens after the exchange?
Once your contracts have been exchanged, you can start to look forward to moving day. There are a few things you need to sort ahead of this:
Book removal vans or rope in friends or family to help you move.
If you’re buying a leasehold property, you’ll need to tell the freeholder that you’re the new owner.
Check your solicitor has registered your details with the land registry for the transfer of ownership.
How long is there between exchange of contracts and completion?
Your solicitor will discuss dates for completion with you once your contracts have been exchanged.
Usually, there’s a period of one to three weeks between exchange and completion, but this may be longer depending on the size of your chain.
Equally, it’s common for the exchange and completion to happen on the same day, so you can get moved in quicker.
The content on this page is for reference and does not constitute financial advice. For impartial financial advice, we recommend government bodies like MoneyHelper