When it comes to buying and selling property, the process can be full of confusing terminology. There are various different stages to tackle and hoops to jump through. It can be pretty stressful, particularly for first-time buyers. However, getting your head around some of the main parts can help you to feel more confident and prepared.
Two of the biggest and most important steps in buying a house are exchange and completion. But what do they mean? What’s involved? Can the deal collapse even after exchange?
This post explores everything about understanding the difference between exchange and completion. We’ll cover what they mean, what happens on exchange day, and how long it can take between exchange and completion.
Defining exchange and completion
Before we get into the difference between exchange and completion, let’s take a look at what each is:
- Exchange: the exchange is the beginning of the end of a property purchase and when the formal agreement takes place. It’s when the buyer and seller swap and sign their respective contracts and agree on a completion date. The buyer will also pay the deposit at this point.
- Completion: the day the legal ownership of the property transfers from seller to buyer. The buyer pays the remaining balance on the purchase and receives the keys. At this point, the sale is completed.
What are the key differences between exchange and completion?
Before exchanging contracts, either side can pause or cancel the deal. However, when the contracts are exchanged and signed, both parties have entered into a legal agreement to complete the transaction for the agreed price on the specified date. If either side pulls out of the deal after this, there will be financial and legal consequences.
If the buyer pulls out, they’ll lose their deposit and may also have to pay the seller’s fees. If the seller pulls out, the buyer can serve a Notice to Complete. This gives the seller 10 days to complete the deal while also paying daily interest to the buyer. If they still don’t complete, they’ll be in breach of contract. They’ll have to repay the deposit as well as cover the buyer’s costs.
How long is there between exchange and completion?
If you’re wondering how long it takes from signing contracts to completion in the UK, there isn’t a specific timeframe. However, it generally takes anywhere between one and two weeks, depending on what both parties agree. This gap allows everyone to plan their moves and make sure they’re ready for the big day.
We sometimes get asked if you can exchange and complete on the same day. Although uncommon it can be done, but usually, it only works for cash buyers with no chain.
What time of day does the exchange of contracts happen?
Most exchanges happen between 10 am and noon as this allows plenty of time for solicitors on both sides to complete the process and the mortgage lender to release the funds.
Although exchanges can happen on any working day, most take place on Mondays, Tuesdays or Wednesdays to allow time for any unexpected delays.
How to ensure a smooth exchange of contracts
Exchanging contracts is usually a fairly simple process, but it can still be stressful and things can go wrong. Understanding what happens on exchange day can help you keep calm and do everything you need to.
On the big day, each party’s solicitor will exchange the contract you’ve already signed, so make sure you do so and get it to them in advance. You don’t need to be there and your solicitor will let you know when it’s done, but you can help it run smoothly by:
- Being available and responsive so your solicitor can get hold of you if they need to
- Ensuring the deposit money is ready to go
- Having your documentation ready
- Keeping solicitors updated about the chain
- Being flexible with completion dates and pre-completion searches
- Proactively working with your mortgage provider to make sure the completion funds will be available when needed
Buying a house can be very stressful. In 2022, a survey by Legal & General found that 57% of Brits consider it the most stressful life event, ahead of having a child and getting a divorce. That said, exchanging and completing doesn’t have to be as long as you plan and work with your solicitors to get it done smoothly.
However, there is another way. If you want to sell your home quickly, Zapperty will make a cash offer on any property within seven days of you contacting us. We’ll take away the stress and the hassle of the transaction with no agency costs or solicitor fees, no work required on your side and a quick deal guaranteed. Contact us today to find out more.
Financial Aspects of Exchange and Completion
Buying or selling a home isn’t just a rollercoaster of emotions—it’s one of the biggest financial decisions you’ll ever make, with thousands (or even millions) of pounds at stake. Truly, the stakes are high, and for many, this could be the biggest transaction they’ll ever make. That’s why understanding the financial implications of exchange and completion is essential. The last thing you want is an unexpected financial hit just when you think everything is settled.
The Buyer’s Deposit at Exchange – What You Need to Know
The exchange of contracts isn’t just a handshake agreement—it’s a binding legal commitment. And with that commitment comes a financial obligation: the exchange deposit. Typically, the buyer must pay a deposit of 5-10% of the property’s purchase price when contracts are exchanged. This is a serious show of intent. The money is transferred to the seller’s solicitor and held in a client account until completion.
But here’s the scary part— if the buyer pulls out after exchange, they lose their deposit. That’s thousands, if not tens of thousands, of pounds gone in an instant. Think about that for a second: would you want to risk a deposit the size of a luxury holiday or a brand-new car? That’s why ensuring your finances are rock solid before reaching this stage is critical.
The Completion Statement – Every Penny Accounted For
Now, you’re almost there! The finish line is in sight, and soon you’ll be free from the stress of selling your home. But before you can officially wave goodbye to this, there’s one last financial checkpoint—the completion statement.
Think of it as your final bill. It lays out, in black and white, exactly where every pound is going. This isn’t just another piece of paperwork—it’s the document that ensures you’re not hit with any unexpected surprises at the last minute. Every seller dreads the thought of a deal falling apart right at the end because of a missing payment or a miscalculation. That’s why getting this right is critical.
So, what’s included? Let’s break it down:
1. The Purchase Price Balance– Where’s the Rest of the Money?
Remember when the buyer paid a deposit earlier in the process? The completion statement shows what’s left to be paid—the remaining amount the buyer owes before they officially own your property. If there’s a mortgage involved, their lender will release the funds at this stage. If the buyer is paying in cash, their solicitor will ensure the money is transferred to you.
2. Legal Fees – Your Conveyancer’s Bill
Selling a property comes with legal costs, and your solicitor or conveyancer needs to be paid for handling the paperwork, contracts, and ensuring everything is above board. These fees will be deducted from the sale proceeds, so there’s no need to make separate payments—just make sure you know what’s included in their charges to avoid any last-minute surprises.
3. Stamp Duty Land Tax (If Applicable) – The Hidden Cost Many Forget
If you’re buying another property at the same time, you may need to pay Stamp Duty Land Tax (SDLT). Many sellers assume this only applies to buyers, but if you’re purchasing another home before selling your current one, or if you own multiple properties, this tax could sneak up on you. If it applies to your situation, it will be listed in the completion statement.
4. Estate Agent’s Fees – Settling the Bill
If you used an estate agent to sell your property, their commission is deducted at this stage. Many sellers feel the sting of this payment, especially if their home took longer to sell than expected or if they felt their agent didn’t do enough to justify their fee. It’s why some homeowners choose alternative routes, like selling directly to a cash house buyer—no fees, no waiting around, just a fast, hassle-free sale.
5. Mortgage Repayment – Closing the Chapter on Your Loan
If you still have an outstanding mortgage, part of your sale proceeds will go towards paying off the remaining balance. Your lender will confirm the exact amount, including any early repayment charges if you’re settling your mortgage sooner than expected. It’s important to check this ahead of time—many sellers forget about these charges and get caught off guard when they see the final figures.
6. Land Registry Fees – Making It Official
Once the sale is complete, the buyer’s name replaces yours on the official property records. This is done through the Land Registry, and there’s a fee involved to update these records. Your solicitor will handle this, ensuring the legal paperwork is filed correctly so that your responsibility for the property officially ends.
Why the Completion Statement Matters (and How It Can Go Wrong!)
This document is the last step before you finally get your money in the bank. But here’s the thing—even the smallest mistake can cause delays. A missing payment, an incorrect figure, or even a tiny miscalculation could throw a wrench in the entire process.
Imagine you’ve packed your bags, hired a removal van, and are all set to move into your new place. Then suddenly, your solicitor calls—there’s an issue with the completion statement, and the funds can’t be released. Your buyer can’t get the keys, your moving plans are in limbo, and the stress levels go through the roof.
This is why having a trustworthy, experienced conveyancer is non-negotiable. They’ll double-check every figure, handle the payments efficiently, and explain everything in plain English—so you know exactly where your money is going.
The Financial Consequences of Withdrawing After Exchange
Many people assume that once contracts are exchanged, the deal is practically done. Wrong. If either party pulls out after exchange, the financial fallout can be devastating.
- For buyers: You forfeit your entire deposit. Imagine saving for years, only to see it vanish overnight. You may also have to compensate the seller for losses, such as legal fees or a drop in their property’s value if they have to relist it.
- For sellers: If you withdraw, the buyer can issue a Notice to Complete, giving you 10 days to proceed. Each day you delay, you’ll owe daily interest. If you still don’t complete, you’ll be in breach of contract and may have to return the buyer’s deposit plus compensation for any losses they’ve suffered.
No one wants to end up in a legal battle, especially when emotions are already running high. That’s why working with experienced professionals is essential to avoid last-minute surprises. Learn all you need to know about capital gains tax when selling a home.
Role of Solicitors and Conveyancers
Navigating the legalities of property transactions can feel like walking a tightrope—one misstep, and everything could come crashing down. That’s why having an experienced solicitor or conveyancer is non-negotiable. These professionals handle the nitty-gritty details to ensure everything is legally sound and financially secure.
What Do Solicitors and Conveyancers Actually Do?
Many buyers and sellers don’t fully appreciate the immense responsibility solicitors and conveyancers take on. Their role includes:
- Reviewing legal documents– They scrutinise the mortgage offer, transfer of title deed, exchange deposit, and completion statement to ensure everything is in order.
- Conducting property searches – Checking for any legal issues, such as boundary disputes, planning restrictions, or environmental concerns.
- Handling identity and pre-completion checks – Verifying the identity of all parties involved and ensuring cleared funds are ready for completion.
- Liaising with mortgage lenders – They ensure the mortgage deposit and purchase price balance are transferred on time.
- Registering ownership with the Land Registry – Once the sale is complete, they update legal records to reflect the new owner.
Their work is meticulous because even the smallest oversight can derail the entire sale.
How Solicitors & Conveyancers Communicate During Exchange & Completion
The exchange and completion process is a high-stakes game where timing is everything. The buyer’s and seller’s solicitors must be in constant communication to ensure the seamless transfer of funds and legal documents.
Here’s how the process unfolds:
- The buyer’s solicitor sends the signed contract and exchange deposit to the seller’s solicitor.
- The seller’s solicitor confirms receipt and finalises the legal exchange.
- The buyer’s solicitor prepares for completion, ensuring all funds are in place.
- On completion day, the mortgage lender releases the funds to the seller’s solicitor.
- The seller’s solicitor confirms receipt and releases the keys to the buyer.
- Finally, the buyer’s solicitor registers the property with the Land Registry, making it official.
Any delays in communication can lead to chaos. That’s why experienced solicitors and conveyancers are worth every penny—they ensure there are no last-minute hitches.
