Exchange and completion are the two big moments in any property purchase or sale. Exchange is when the deal becomes legally binding. Completion is the day ownership changes hands and you get the keys. They usually happen on different days, and the gap between them matters. Here is what each one means, what you pay, and what to expect.
1 What exchange of contracts means
Exchange of contracts is the point at which the agreement to buy and sell becomes legally binding on both sides. Before exchange, either party can walk away without penalty. After exchange, neither can pull out without serious financial consequences. It is the step that turns a hopeful deal into a firm one.
In practice, the buyer and the seller each sign their own copy of the contract. The two conveyancers then exchange them, traditionally over a recorded phone call following a set wording, so the deal locks in at a precise, agreed moment. From that point the price, the property and the completion date are all fixed. If you want to see where this sits in the wider journey, our step-by-step conveyancing guide maps out everything that leads up to it.
For exchange to happen, several things normally need to be in place. The searches are back and reviewed, enquiries are answered, the mortgage offer is issued, the survey has been considered, and the buyer's deposit is ready. Until those are sorted, a good conveyancer will not let you exchange, because you would be committing before you really know what you are buying.
Once contracts are exchanged you are legally committed. If you pull out after exchange you can lose your deposit and may be liable for the other side's losses, so confirm your mortgage and money first.
2 The deposit explained
On exchange, the buyer pays a deposit, usually 10% of the purchase price, although a smaller amount is sometimes agreed between the parties. This money is sent from the buyer's conveyancer to the seller's conveyancer and is held as the buyer's commitment to the deal.
The deposit here is not the same as your mortgage deposit, though the two often come from the same savings. It is the sum that shows you are serious and gives the seller protection. If the buyer fails to complete after exchange, the seller can usually keep it. The rest of the purchase money, including your mortgage funds, is sent later, on completion day.
In a chain, the deposit paid by the buyer at the bottom can sometimes be passed up the chain to fund the purchases above. Your conveyancer will explain how this works for your particular sale or purchase, and whether you need the full 10% available or a reduced figure has been agreed.
3 The gap between exchange and completion
Between exchange and completion there is usually a gap of one to two weeks, though it can be anything from same-day exchange and completion to a month or more, depending on what everyone agrees. The completion date is fixed at exchange and written into the contract, so everyone in the chain knows exactly when they are moving.
This gap exists for good reasons. It gives the buyer's conveyancer time to request the mortgage funds from the lender, gives everyone time to book removals and confirm logistics, and lets each party in a chain coordinate so they all move on the same day. A same-day exchange and completion is possible, but it leaves no margin if anything slips.
During this window your conveyancer carries out final pre-completion checks, including priority searches at the Land Registry, and gets everything ready to send the money. If you are wondering how the whole timeline fits together, our guide on how long conveyancing takes walks through it.
Until contracts are exchanged the date is not certain. Waiting until exchange to confirm and pay removal firms avoids losing deposits if the date moves.
4 What happens on completion day
Completion is the day the balance of the purchase money is transferred, legal ownership passes to the buyer, and the keys are released. For most people this is moving day. It is the moment the property is finally yours, or, if you are selling, the moment it stops being yours.
Completion usually runs in much the same order on the day:
- The buyer's conveyancer sends the remaining purchase funds to the seller's conveyancer, usually by mid-morning or early afternoon.
- The seller's conveyancer confirms the money has arrived in full.
- The seller's conveyancer tells the estate agent to release the keys to the buyer.
- The seller's outstanding mortgage on the property is paid off from the proceeds.
- The buyer collects the keys, often from the estate agent, and can move in.
- After the day, the buyer's conveyancer deals with Stamp Duty and registering the new owner at the Land Registry.
Money tends to move through the chain from the bottom up, so if you are partway up a chain you may be waiting on the buyer below you before your own funds arrive. This is why completions sometimes run later in the day than people expect. Try to stay flexible and keep your phone on.
After completion, the buyer's conveyancer handles two important jobs. The first is paying any Stamp Duty Land Tax due, a tax that depends on the price and your circumstances and which you can read about in our Stamp Duty guide. The second is registering you as the new owner at the Land Registry. Both have deadlines, so they are handled promptly.
5 How exchange and completion differ
The simplest way to remember it: exchange makes the deal binding, completion makes it happen. At exchange you commit and pay the deposit. At completion you pay the rest, ownership transfers, and you get the keys.
- Exchange: contracts become legally binding, the completion date is fixed, and the buyer pays the deposit (usually 10%).
- Between the two: a gap of typically one to two weeks for funds, removals and chain coordination.
- Completion: the balance is paid, ownership transfers, keys are released, and you move in.
- After completion: Stamp Duty is paid and the new owner is registered at the Land Registry.
This split between exchange and completion applies in England and Wales. In Scotland the deal becomes binding when missives are concluded, and there is no separate exchange step. Northern Ireland has its own process too, so check local advice if you are moving there.
Costs and timescales vary with the property, the chain and your lender, so treat any figures here as general guidance rather than fixed numbers. To see realistic fees for your move, you can compare fixed-fee quotes from SRA-regulated solicitors and licensed conveyancers, side by side, free and with no obligation, in about 60 seconds.