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  1. Guides
  2. Exchange and completion
House Selling Process
House Selling Process
Last Updated 12 October 2021

Exchange and completion

Sam Edwards
Writer
  1. How to sell your house step by step
  2. 12

When a seller accepts an offer on their property, the sale approaches its conclusion: exchange and completion. After an exchange of contracts, a completion date is set. This is the date when ownership transfers to the buyer. These are the last steps before a sale is complete.

While this is an exciting period for buyers and sellers, it can also be quite stressful. A lot can happen between exchange and completion, so it's important to prepare as much as possible.

In this section, we'll talk you through exchange and completion in a step-by-step format. We'll also evaluate some of the risks involved throughout the process.

What's the difference between exchange and completion?

The difference between exchange and completion is fairly straightforward: you’re legally bound to complete the transaction after an exchange of contracts, while you fully own the house after completion. Below, are their full definitions:

  • Exchange refers to the exchange of contracts between the seller's solicitor and the buyer's solicitor. After the exchange, both parties are legally bound to complete the transaction. It is during this process, that a completion date is set.

  • Completion refers to the completion date of the property transaction. It takes place after the seller's solicitor confirms they have received payment for the property. On the completion date, the seller's agent meets the buyer to hand over keys to the property. The date marks the final transfer of property ownership.

How long after the mortgage offer to exchange?

The average wait is 2 months from the date the buyer first handed in their mortgage application until exchange. The time between a mortgage offer and an exchange of contracts depends on how quickly the buyer's conveyancer is able to get everything ready.

Is an offer on a house legally binding in England?

If you've accepted a verbal offer on a house, you might be wondering whether it's illegal to pull out. No, offers are not legally binding in England until contracts have been exchanged. However, it’s considered bad etiquette to pull out of an offer, especially if you've received a higher offer. This is called gazumping.

What to do before you exchange contracts

Before an exchange of contracts can get underway, the buyer and the seller need to get their affairs in order. While both parties have certain responsibilities, buyers have much more to deal with.

If you're a buyer you should

  • Arrange Buildings insurance on your property. Buildings insurance covers your home against damage to its structure and fixtures. Packages usually cover damage by floods, fires, storms and vandalism.

  • Check your surveys. Are they complete and are you happy with the results?

  • Ensure you have your mortgage offer in writing. You don't want to lose your mortgage after you agree to purchase the property.

  • Make sure you have the deposit funds ready. The deposit is usually 5 - 10% of the property price, but your conveyancer will advise on the final figure.

  • Make sure you know what fixtures and fittings you get to keep. You don’t want to be misled about what your purchase includes. If you keep a list, you can ensure you are compensated if they don’t abide by what was agreed.

  • Ensure the Energy Performance Certificate (EPC) rating is to your liking. Scores of 'A' or 'B' are the best, while scores of D and E are poor. You can read more about EPCs here in our guide to 'Energy Performance Certificates (EPC)'.

If you're a seller you should

  • Respond to all of the buyer's enquiries. Clear answers will help the exchange run smoothly.

  • Ensure you have all the relevant documentation for the buyer's inspection. This includes warranties, certifications of building works, and guarantees.

Why might the exchange not happen on the planned date?

A contract exchange might not happen on the planned date due to a couple of reasons.

If you're in a property chain, your solicitor will have to call several other conveyancers up the chain. If one conveyancer isn't available, or the process overruns, they will have to start all over again the following day.

If you're not in a property chain, this is less likely to happen - but a conveyancer might still change dates. That's why it's important to pick a firm that you trust. The best conveyancers will accommodate your dates using up-to-date technology.

For more information, check out our guide on 'How to pick a conveyancer'. Or if you’re worried about their fees, read our guide to 'Conveyancer’s fees' here.

What happens at the exchange of contracts?

The exchange of contracts usually takes place over the phone. It is carried out by the conveyancers of the buyer and seller. What happens at the exchange of contracts is:

Buyers and sellers must

  1. Sign the contract of sale. This is the legal contract for the property transaction. It contains the price, the amount of deposit, and the completion date. It is a legal agreement and once contracts are exchanged, the transaction is legally binding.
  2. Sign the deed of transfer of title.
  3. Agree upon a completion date. While the date needs to be agreed by both parties, it’s best set some weeks in advance.

Conveyancers must

  1. Confirm the house sale across the entire property chain (if the parties are part of one). The seller's solicitor must confirm with the next conveyancer and so on, until all parties have been notified.
  2. Exchange signed contracts after a moving timeframe has been confirmed. The buyer's conveyancer will receive the fully signed title deed. Both parties are now legally bound to complete the transaction.

The buyer's lender completes one last survey of the property before releasing the mortgage funds. Once these funds are transferred to the seller, the buyer's ownership of the property is registered with the Land Registry.

The buyer is ready to collect the keys to the property on completion day.

How do you agree on a completion date?

The best way to agree on a completion date is to compromise. There are usually 2 to 4 weeks between exchange and completion to allow all parties to make moving arrangements. There's a lot of stuff to plan, including:

  • Moving items from one property to another.
  • Arranging the transfer of services like broadband

The more people involved in a property chain, the more time it takes to find a date that can work for everyone. The odds are no one will find a date that works completely for them.

Which is the best day to complete?

For most people who work full time, the best day to complete is Friday. This gives you enough time to move and unpack your things.

Can you move on a different day to Friday?

Yes you can move any day that works for you. Moving on a day mid-week has its benefits. If you move to a new home on Friday, you'll spend your weekend moving everything around, which means you'll have less time to relax. Also, if a payment issue arises, you won't have to wait over the weekend to sort it.

Can you pull out after a contract exchange?

You can pull out after a contract exchange, but this will breach the terms of your contract and incur financial penalties. It's rare for either party to pull out after an exchange of contracts, because you are legally bound to complete the transaction.

If you're a buyer looking to pull out after a contract exchange, it's important to remember that you have the most to lose. Your house deposit (plus interest) will be forfeit.

Never proceed to the exchange if you have doubts about the transaction. If you do need to pull out due to unforeseen circumstances (bereavement, trauma), you might be able to negotiate on compassionate grounds. You could get the seller to reduce the scale of your financial losses.

If you're a seller looking to pull out after a contract exchange, this isn't as expensive. You will however, be liable for the buyer's conveyancer and surveyor fees.

Remember, future estate agents will be wary of your commitment to selling if you pull out at such a crucial stage.

What should your estate agent be doing during exchange and completion?

While exchange and completion has a lot to do with solicitors, your estate agent shouldn't be idle. A good estate agent will be proactive in motivating both parties to complete the sale:

Your estate agent should

  • Update the buyer and seller: As both parties are unable to communicate with one another's conveyancer, agents should update parties on the progress of the sale.

  • Help negotiate: Thanks to their years of experience, agents can negotiate between both parties should any issues arise.

  • Provide reassurance: This is a stressful period, but a good agent has seen many sales through to the end. A good agent will provide reassurance to both parties throughout the exchange and completion process.

You can find the right estate agent for your sale with our free Estate Agent Comparison tool.

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What could go wrong between exchanging contracts and the completion date?

While exchanging contracts makes both parties obligated to complete the sale, there are several things that can go wrong before completion:

  • As we have already covered, a buyer or seller could pull out of the transaction.
  • The property chain (or conveyancing chain) breaks because another buyer or seller pulls out.
  • The house is damaged as a result of fire, flood or storm.

Let's take a closer look at these in more detail:

The property chain breaks due to another buyer or seller pulling out

Unless you are, or selling to, a first-time buyer or cash buyer, your sale is likely part of a property chain.

A property chain involves several sets of buyers and sellers relying on one another to complete sales. A seller might hope to use the equity from their property's sale to purchase a new home. This makes them a buyer reliant on another transaction going smoothly.

A property chain can break for a number of reasons. For example, if a buyer further up the property chain has their mortgage offer revoked, this will have a knock-on effect on all the other parties.

If a property chain breaks, everyone in the chain will find themselves in breach of contract if they cannot complete the transaction. If this happens to you, it's important to move fast in order to prevent the worst outcome.

We recommend contacting your conveyancer immediately if the chain does break. Account for all your costs, expenses and losses by gathering together any evidence you have, including receipts and invoices. Depending on where in the property chain you are, you’ll either have to make claims against a buyer or seller, or prepare for claims to be made against you.

The house is damaged as a result of fire, flood or storm

If the house is damaged as a result of fire, flood or storm before the completion date, the sale must still go ahead. Who is liable for these damages depends on the terms negotiated in the contract of sale.

How do you minimise problems between exchange and completion?

There's a few things you can do to prevent any problems from occurring between exchange and completion:

  • Get a good conveyancer: One of the best ways to minimise problems between exchange and completion is a reliable conveyancer. A good conveyancer will ensure funds are delivered on-time. You can read more about 'How to find a good conveyancer' here.

  • Manage your budget: Make sure you have the right funds for removal day and any other extra fees you might need to pay on completion day.

  • Maintain healthy dialogue: Whether you're a buyer or seller, it's best to keep things open and friendly. Ensure all communication is clear and transparent.

How long after the exchange is completion?

Most people usually wait 1 to 3 weeks between exchange and completion, but this period can be as long as 2 months. There's several reasons why this might be the case:

  • If you're buying a new build home, construction might not be completed. This can cause a long delay.
  • If you live in rented accommodation, the notice period might influence the date of the completion.

In rare circumstances, exchange and completion can happen on the same day.

The time between exchange and completion depends on what both parties agreed in the contract exchange. This date is also subject to the availability of parties across the property chain. If it's a long chain, the chances are someone will need to accommodate a life event, like having a baby.

A longer wait period has its benefits. It's important you have enough time to find a removal company you can trust. Moving home is a stressful time, so ensure you have a good window in which to book.

Can you exchange and complete on the same day?

You could exchange and complete the sale on the same day, but we wouldn't recommend it. Moving these dates together will increase the possibility of something going wrong:

  • Someone further down the chain might not have enough money and late payments will prevent completion from going ahead.
  • Removal companies need enough notice to book you in. Exchanging and completing on the same day can prevent you from finding a decent removal company. This will cause stress for everyone.

Make sure you spread out your exchange and completion dates. Book your removal companies with confidence, rather than in a rush.

What happens between exchanging contracts and completion day?

Between exchange and completion, both parties should make arrangements to meet the set date for completion.

If you're a buyer you should...

  1. Confirm your moving arrangements with a reliable removals company. It's a good idea to start packing too. Leaving things till the last minute will cause a great deal of stress.
  2. Arrange the transfer of services like broadband or satellite.
  3. Change your registered address with contracts and services.

Your conveyancer should be working with your mortgage company to ensure the correct amount of money is transferred on completion day. They should also be drawing up a final statement for completion day.

If you're a seller you should...

  1. Confirm your moving arrangements with a reliable removals company. Don't leave packing until the last minute!
  2. Double check the correct fixtures and fittings are being left behind.
  3. Change your registered address with contracts and services.
  4. Leave your keys with your estate agent so they can hand them over on completion day.

Your conveyancer should confirm a final redemption amount with the buyer's mortgage lender. They should also draw up a final statement for completion day.

What happens if the completion date isn't met?

If you fail to meet the completion date, you will be in breach of the sale contract. As with pulling out of the sale, the buyer has the most to lose in this scenario.

If you're a buyer and you fail to complete, you'll be served a notice to complete the sale within 10 working days (2 weeks). This is the conditional period before contracts are rescinded. During this period, you will be liable for interest on any funds not sent through to the homeseller.

Not completing within 10 working days will lead to

  • The contract being rescinded and your deposit being forfeit
  • The seller putting their property back on the market

The seller will be able to pursue losses if they can't sell their property for the same sale price.

If you're a seller and you fail to complete, the buyer is free to rescind the contract (unless you've already withdrawn it).

You will also be liable for:

  • Returning the buyer's deposit
  • Paying the buyer's costs and legal fees

What happens on completion day?

On completion day, the property transaction is finally concluded. Whether you're a buyer or seller, this is usually a massive relief.

Of course, there's still time for things to go wrong - the biggest issue on completion day is the buyer's funds being transferred on time. If you're a buyer, your conveyancer should aim to transfer payment before 3pm on Friday. Any payment after this time may not be processed until the following day.

Should everything go according to plan, the conveyancers of both parties follow a schedule like this:

  1. The buyer's conveyancer transfers all the purchase money (including mortgage) to the seller's solicitor.
  2. The buyer's conveyancer will then register the title deed of ownership with the Land Registry.
  3. Any outstanding Stamp Duty Land Tax (SDLT) is paid by the buyer's conveyancer.
  4. The buyer's conveyancer sends the buyer several documents confirming their work is complete. These include the Title Information Document, a summary of data the Land Registry holds, and an SDLT5 certificate. This certificate confirms the SDLT has been paid.
  5. Meanwhile, the seller's solicitor redeems the mortgage payment on the property. They will pay any other outstanding bills, including the estate agent's fee and their own.
  6. The seller's solicitor will transfer the remaining balance over to the seller.

Once the conveyancers have confirmed their payments, the buyers and sellers will follow their own schedule:

  • The seller should aim to vacate the property by 1pm as per industry practice.
  • They should take any final meter readings, before handing their keys over to their estate agent (or a prior agreed person).
  • The buyer goes to meet the estate agent (or agreed person) to collect the keys to their new home.
  • The buyer should make sure all the agreed fittings and fixtures have been left behind.
  • The buyer should change the locks on their new home. The seller's handymen and family members may still have copies.

How can you speed up exchange and completion?

Speeding up the process of exchange and completion has a lot to do with being prepared for each stage of the home selling and home buying process.

If you're a buyer

  • Avoid being part of a chain (this isn't easy if you're not a first time buyer or a cash buyer).
  • Book your surveys early.
  • Have your money ready for completion.
  • Find a good conveyancer.

If you're a seller

  • Make sure you communicate clearly with the buyer throughout the selling process.
  • Find out about other parties in the chain.
  • Ensure you have all the necessary documentation for the exchange of contracts.
  • Find a good conveyancer.

FAQs

What does it mean when you exchange contracts when buying a house?

When your offer is accepted by a home seller, you need to exchange contracts and agree on a completion date. Your conveyancers will contact each other (usually by phone) to exchange signed sales contracts. If you are part of a property chain, the other chain parties must exchange contracts on the same day. This is to ensure all parties are able to conclude their sale. When contracts are exchanged, a completion date is set.

What is a completion date when you're buying a house?

The completion date is the day your house purchase is concluded. On completion day, your funds are transferred by your conveyancer to the seller's solicitor. After the buyer has moved out (usually by 1pm) you can collect the keys to your new home and start moving in.

When do I receive funds from a house sale?

You receive funds from your house sale on completion day. After deducting both their fee and your estate agent's, the conveyancer transfers your funds to your account.

Do I own the house on exchange or completion?

Exchange is when the sale becomes legally binding, while completion is when the buyer becomes the new owner of the property, so you would own the house after completion.

Can you do building work between exchange and completion?

You can do building work between exchange and completion by using a side legal agreement called a Key Undertaking. Home sellers will ask for a Key Undertaking if they need to get their property finished to a good standard. This can happen if the property has been vacant for a while and needs refurbishment.

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