Exchange and Completion explained
Updated: 21st Oct, 2024
Author: Charlotte Burton
As you progress towards the end of your home buying journey, you will hear references to your Exchange and Completion dates. Below we explain what these are and an overview of what will happen on each of them.
🔀 What is exchange & when does it happen?
Exchange is the moment when the buyer and seller swap (“exchange”) signed contracts via their conveyancers. They are then legally committed to the sale and purchase of the property.
Exchange normally happens right near the end of the home buying process. It can happen on the same day as completion (see below), but it's generally about 1-4 weeks before.
That's because some mortgage lenders won't transfer money until the sale is legally committed to (the point of exchange). The lender then takes 5 working days to transfer the money, which is why there's normally at least a week between exchange and completion.
Exchange is the point of no return, so make sure you've completed all checks on the property, like searches and a survey, and are certain you want to buy the property before you think about exchange!
Learn what else you need to have done before Exchange in "How to agree Exchange & Completion dates".
- The seller receives a payment of ~10% of the property’s value from the buyer (sometimes referred to as a deposit, even though it might be lower than your total deposit). This is why you must transfer your deposit to your conveyancer in advance.
- The buyer becomes legally responsible for the property. This includes any damage that happens to it, which is why you need to have buildings insurance in place from the date of Exchange onwards.
If you, as the buyer, pull out after Exchange:
- You will not be able to get back the ~10% you paid the seller.
- You may also be liable to be sued for the seller's costs of getting a replacement buyer. These include their legal costs & the difference in the property price if the property is sold for a lower value.
If the seller pulls out after Exchange:
- You can sue them for the costs you paid, as they are in breach of contract.
âś… What is completion & when does it happen?
Completion is the day when the sale is completed, and you now own the property! You can pick up the keys from the estate agent and move in. 🗝️
Completion generally takes place 1-4 weeks after Exchange. It can take place on the same day as Exchange if the mortgage lenders of everyone in the chain allow it.
If you are buying an “off-plan” New Build home that is still under construction, completion may take place months after you exchange.
Learn how to pick a date for completion in "How to agree Exchange & Completion dates".
- Your conveyancer will transfer all the remaining money for the home to the seller's conveyancer. This includes the mortgage and any remaining deposit.
- The seller's conveyancer needs to confirm to your conveyancer that the money has arrived.
- Meanwhile, the seller is moving out of the property. They normally have until 1pm on the day of completion to vacate the property.
- After this, you'll get a phone call saying you can pick up the keys from the estate agent! 🎉🎉
