Exchange and completion are the two key moments in every property transaction. They are often confused, but they mean very different things.
Exchange of contracts
Until contracts are exchanged, either side can walk away without penalty. On exchange, the buyer’s and seller’s conveyancers swap signed contracts, usually by telephone under agreed procedures, and the deal becomes legally binding.
At exchange the buyer pays a deposit and the completion date is fixed. If the buyer then fails to complete, they are likely to lose the deposit. If the seller fails to complete, the buyer can take action against them.
Between exchange and completion
This period can be anything from a day to several weeks. During it, we carry out final searches, request the mortgage funds from the lender and prepare the completion statement showing exactly what money is needed.
Completion
Completion is the day ownership passes. The buyer’s conveyancer sends the remaining money to the seller’s conveyancer. Once it arrives, the seller’s conveyancer confirms completion and the estate agent releases the keys.
After completion
On a purchase, we file the Stamp Duty Land Tax return and register the new owner at HM Land Registry. On a sale, we pay off the seller’s mortgage, pay the estate agent and send the balance to the seller.
Exchange and completion on the same day
Sometimes, for example when there is no chain or everyone is ready, exchange and completion can happen on the same day. It saves time but leaves no binding commitment until the very last moment, so we will talk you through the risks.
This guide is general information, not legal advice for your situation. Every transaction is different, so please contact us to talk about yours.