The two main reasons for having a gap between exchange and completion are:

  • for the mortgage lender to release the funds and
  • to make the whole process a little less stressful for the buyer and seller.

In this blog we’ll unpack exactly what we mean by exchange and completion, and why it’s usually a good idea to have about a week or so between the two processes.

What happens on ‘exchange’?

When your solicitor exchanges contracts with the other side, the property transaction becomes legally binding.

That means that if you back out of the transaction after exchange of contracts, you will be in breach of contract, for which there will be financial implications.

As the buyer, you have the most to lose because the contract usually allows the seller to keep your deposit if you change your mind after exchange. You will also have to pay the seller’s legal fees, and the seller could claim damages from you for other losses they have suffered.

As you can see, the losses can really stack up for the buyer. The moral of the story is; if you have any doubts about the transaction, don’t exchange!

The seller has less to lose since they’re not handing over the deposit. But they will still be in breach of contract if they back out after exchange, and will have to pay the buyer’s legal fees, and possibly damages.

All-in-all, it’s a huge headache for you if you back out of the transaction after exchange. Thankfully, it’s very rare, but it’s worth emphasising the importance of the exchange. The reason there’s a gap between exchange and completion is certainly not to give either side time to change their minds.

What happens on completion?

The completion date is the day on which you get the keys to your new home and you can move in. By this time, the buyer’s solicitor will have transferred the full purchase price (comprising your deposit plus the mortgage) to the seller’s solicitor.


Why the gap?

There is usually about a week between exchange and completion, but sometimes it’s longer and can be as much as four weeks.

The main reason for the delay is to give the mortgage lenders time to release the funds. Most mortgage providers will require five working days between exchange and completion. One thing to note at this point – if you’re dealing with a cash buyer, then you may get away with less of a time gap between exchange and completion. You could even technically do both processes on the same day, but for your own peace of mind, you might want a few days to prepare to move.

That’s the other big reason for the time lag: making your moving arrangements.

Your removals company will need a firm date for moving your things, and you can’t give them a firm date until you’ve exchanged contracts. You’ll need some time for packing up, and doing the practical things like moving your broadband and utilities contracts.

Overall, there’s less stress for buyers and sellers if there’s at least a week’s delay between exchange and completion. The transaction isn’t assured until contracts are exchanged. Once everything is legally binding, there’s a flurry of moving practicalities to get sorted, and you’ll probably need at least a week for all those activities.

Me and my team will keep you in the loop at every stage of your transaction and clearly explain what each step means for you practically, and legally. If you’d like a honest, efficient and reliable conveyancer for your next home move, please do give us a call.