Useful Articles

Exchange of Contracts vs Completion: What Is the Difference?

Two terms that cause persistent confusion in the home-buying process are exchange of contracts and completion. People sometimes use them interchangeably, but they are two distinct events separated by days or weeks - and the difference between them is legally and financially significant.

Exchange of Contracts

Exchange is the point at which the property transaction becomes legally binding. Both the buyer and the seller sign identical copies of the sale contract. Their respective solicitors then exchange these documents - traditionally by telephone, with each solicitor reading out the contract details to confirm they match, then posting the signed copies to each other.

At exchange, the buyer pays their deposit (commonly around 5-10% of the purchase price, though the exact figure is set by the contract and can be negotiated) to the seller's solicitor. A completion date is also fixed at this point, agreed by both parties in advance.

From exchange onwards, neither party can withdraw without serious financial penalty. If the buyer pulls out after exchange, they typically lose their deposit. If the seller pulls out, they must usually return the deposit and may be liable for further compensation. The precise consequences depend on the terms of your contract, so ask your solicitor to explain them before you exchange. This is what makes exchange the key milestone in the process - before it, everything is uncertain; after it, both sides are committed.

Completion

Completion is the day the property legally changes hands. On completion day, your solicitor transfers the balance of the purchase funds (the full purchase price minus the deposit already paid) to the seller's solicitor via bank transfer. Once the seller's solicitor confirms receipt, they authorise the release of keys - usually via the estate agent.

From this moment, you are the legal owner of the property. Your solicitor then handles the post-completion work: paying any Stamp Duty Land Tax due. In England and Northern Ireland you must send an SDLT return and pay the tax within 14 days of completion (gov.uk: Stamp Duty Land Tax deadlines); they also register you as the new owner at HM Land Registry.

How Long Between Exchange and Completion?

The gap between exchange and completion is agreed by both parties at the time of exchange. There is no fixed legal period - it is whatever the two sides arrange. In practice a gap of one to four weeks is common, though it can be as short as the same day (simultaneous exchange and completion) or as long as a few months. A gap of one to two weeks is a frequent choice, as it gives both parties time to arrange removals and make practical preparations.

Simultaneous exchange and completion is sometimes used in chain-free transactions where both parties want a quick conclusion, but it carries more risk as there is no buffer period between committing and actually moving.

What Happens if Something Goes Wrong Between Exchange and Completion?

Once contracts have been exchanged, the transaction is binding - but problems can still arise. If the seller's property is damaged between exchange and completion (a fire, for example), there are complex questions about who bears the risk, which is why buildings insurance is often arranged to be in place from exchange - check what your contract requires. If a party defaults without a valid legal reason, the other party can enforce the contract through the courts and claim damages.

A Quick Reference Summary

This article is for general guidance only and reflects the conveyancing process in England and Wales. The legal process differs in Scotland. Always seek advice from a qualified solicitor for your individual circumstances.

Last reviewed: 14 June 2026. This is general information, not legal advice - always check the current gov.uk guidance.