What is an Exchange Contract?

What is an Exchange of Contracts?

The exchange of contracts is when the buyer and seller legally commit to the sale of a property. Each party signs an identical contract, and their solicitors then swap (or “exchange”) those signed contracts.

Why is it Important?

Before exchange, either party can back out of the deal without legal consequences.

After exchange, the agreement becomes legally binding. If either side pulls out, they could face financial penalties — for example, the buyer may lose their deposit, and the seller could be sued for damages.

What Happens at Exchange?

• Both solicitors confirm the contract details are correct.

• The buyer pays a deposit (usually 5–10% of the purchase price).

• A completion date (the day you get the keys and the money is transferred) is agreed — this is typically 1–4 weeks after exchange, though both parties can negotiate a different timeframe.

• Contracts are exchanged over the phone in a recorded conversation, known as an exchange of contracts call.