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what happens at exchange of contracts

Once your offer is accepted and your solicitor has done his due diligence, many wonder what happens at exchange of contracts?

Below I outline what you will need to do to get you across the line, at this crucial stage.

First off, you will need to forward a deposit, typically 10%, to your solicitor in preparation for exchange. To guarantee funds are clear and there aren’t any delays, this ought to be done the day before exchange. 

Transferring funds to your solicitor for exchange

Before you do anything, find out how long a bank transfer will take with your bank.

If your bank uses Faster Payments you ought to be able to transfer up to £250,000 the same day. For larger sums you will need to arrange a CHAPS payment. 

Sign the contract of sale

Your solicitor will send you a contract of sale that you will need to have signed and returned to them, before exchange can take place.

Organise home insurance

Most lenders require you to have home insurance in place from the date of exchange. To get quotes you will need to provide the full address, rebuild cost and value of contents, if getting contents insurance at the same time.  

Notify and set up Utilities and Post
  • Set up a redirection of your post from your current address.
  • Notify utility providers of your move in date and details
  • Set up Wi-Fi/Broadband to commence post completion.
Book Removers

Now you have confirmation of a date for completion you can finalise your removers. Remember, unless the property you are moving into is empty, you won’t be able to gain access till you have received confirmation from your solicitor of completion and the sellers have moved out.


Frequently asked questions:

When can you exchange contracts?

You can exchange contracts on a property when your solicitor has the following:

  • All enquiries, searches, deposit funds and survey are back and checked
  • Confirmation for authority to exchange
  • The mortgage company has confirmed lending is in place
  • They are in possession of a signed contract. 
  • A date has been agreed for completion
Can a conveyancing solicitor sign a contract on behalf of his client?

Yes, but only if you have given express authority to do so in advance.

How do solicitors exchange contracts

Solicitors read out contracts over the phone to each other, confirming contents. Funds, typically 10% of the purchase price, are then transferred to the seller’s solicitor. The phone call is recorded and then signed paper copies are sent out to each other in the post.

This is now a binding contract between both parties. 


What happens if the seller or buyer pulls out after exchanging contracts? 

Should the buyer pull out they’d lose their 10% and their solicitors fees. Should the seller pull out they’d have to return the 10% and pay their solicitors fees. Some buyers ask for their solicitors fees to be paid for the inconvenience. This is reliant on the seller’s moral compass.


How long between exchange and completion?

If you are a cash buyer, it is possible to do a simultaneous exchange and completion. For mortgage purchases, expect around 5 working days for most lenders. 

On average, unless a delayed completion has been agreed. (When a seller requests for an extended period to either search for another property or wait for an onward purchase to be available.) Completion happens around 7-28 days after exchange.

So now you know the basics on what happens on exchange of contracts, for the next steps please see What happens on completion?