Exchange vs Completion: What Happens at Each Stage?

What Is Exchange of Contracts?

Exchange of contracts is the point at which a property sale becomes legally binding. Until exchange, either party can walk away without financial penalty (though they lose any costs already incurred, such as survey and legal fees). At exchange, both buyer and seller sign identical copies of the contract, the signed contracts are physically or electronically exchanged between solicitors, and the buyer pays a deposit — typically 10% of the purchase price.

From the moment of exchange, neither party can withdraw without serious consequences. The buyer who pulls out loses their deposit. The seller who withdraws faces a claim for damages and can be sued for the buyer's wasted costs. A completion date is also agreed at exchange — it becomes a contractual obligation.

What Happens Between Exchange and Completion?

The gap between exchange and completion is typically 1–4 weeks. During this time, the buyer must arrange buildings insurance to begin from exchange (the property is now contractually theirs to complete on, and the risk transfers at exchange). The buyer also finalises their mortgage drawdown arrangements with their lender.

Both parties begin making practical arrangements: removals bookings, utility notifications, address changes. Your solicitor will prepare the completion statement — a final account showing the purchase price, mortgage advance, deposit already paid, and any adjustments for council tax or service charges paid in advance.

What Is Completion?

Completion is the day ownership legally transfers from seller to buyer. On completion day, the buyer's solicitor sends the balance of the purchase funds (purchase price minus deposit already paid) to the seller's solicitor. Once received and confirmed, the seller's solicitor authorises the release of keys, the seller vacates the property, and the buyer can collect the keys from the estate agent.

At completion your solicitor also redeems the seller's mortgage, pays the estate agent's fee, deducts their own fees and disbursements, and transfers the net balance to the seller. The buyer's solicitor registers the new ownership at HM Land Registry — this takes several weeks to process and does not affect the legal transfer, which happens on the day.

Timing and Risks

Most chains aim to complete within 2 weeks of exchange. Completing on the same day as exchange (sometimes called 'simultaneous exchange and completion') is possible in simple transactions but is riskier because it leaves no time to recover from last-minute problems.

The most common completion-day problems are: delayed fund transfers (which can push completion past the agreed deadline), keys not being available because a chain member has not vacated, and solicitor system failures. If completion does not happen by the contracted time, the defaulting party pays compensation at a daily penalty rate specified in the contract.

• ▸Avoid Friday completions if possible: If anything goes wrong on a Friday afternoon, it cannot be resolved until Monday — leaving buyers without keys for the weekend
• ▸Have your bank details confirmed well in advance: Solicitors need verified bank account details for fund transfers — confirm these weeks before completion, not on the day
• ▸Keep your phone on all day: Completion involves multiple calls and confirmations between solicitors — being unreachable causes delays

What Happens If Completion Is Delayed?

If the buyer fails to complete on the agreed date, the seller can serve a Notice to Complete giving the buyer 10 working days to complete. If completion still does not happen, the seller can rescind the contract and retain the deposit. They may also claim damages for any additional losses.

If the seller fails to complete, the buyer serves a Notice to Complete. If the seller still does not complete, the buyer can rescind and claim back their deposit plus interest and potentially additional losses. In practice, most completion delays are resolved on the day or within a few days without escalating to formal notices.

Frequently Asked Questions

Can exchange and completion happen on the same day? Yes, but it is risky in chains because all parties must be ready simultaneously with no margin for error. It is most common in simple two-party, cash transactions where no mortgage is involved.

Is my deposit safe between exchange and completion? Your deposit is held by the seller's solicitor as stakeholder (held on behalf of both parties) or as agent (can be passed up the chain). As stakeholder, your deposit is protected if the seller becomes insolvent. Ask your solicitor to confirm the basis on which the deposit is held.

What time does completion happen on the day? There is no fixed time — completion happens when funds are received by the seller's solicitor, which depends on when the buyer's lender releases the mortgage advance and the bank transfer clears. Most completions happen between 11am and 3pm. Chains completing at the same time require the funds to cascade down sequentially.

Do I need to be present at exchange or completion? No — both are handled by solicitors and do not require your physical presence. You sign the contracts in advance and return them to your solicitor. On completion day you vacate the property (seller) or collect keys from the agent (buyer).

Can the seller ask for more money after exchange? No — the sale price is fixed at exchange and cannot be changed unilaterally. Any price reduction after exchange (gazundering) would require the agreement of both parties and the amended contract signed again.

What happens to the deposit if the sale falls through after exchange? If the buyer withdraws after exchange, the deposit is forfeited to the seller. If the seller withdraws after exchange, the buyer is entitled to the return of their deposit and may also claim damages for losses such as survey costs, legal fees, and removal costs.

Related Guides

Free Calculators