What happens after exchange of contracts when buying a house?
When buying your home one of the critical points referred to by everyone is ‘exchange of contracts’. But what is it and why is it important?
Too many people still think that once they have their offer accepted on a property they have bought it. Sadly, it’s not that simple. In fact, this is just the start of a process which can be long-winded and frustrating.
After agreeing terms, the lawyers get to work. They will need to undertake searches, prepare the contract for sale, arrange the mortgage offer and acceptance with your mortgage adviser and generally formalise the process so that it is (i) legally enforceable and (ii) does not leave you exposed to foreseeable risks.
It is really only once you have entered into a contract to purchase (or sell) that you are committed. Your lawyer should make sure this does not happen until all the necessary formalities have been completed. He or she will then ask you to sign the contract. He can exchange without you physically signing if you agree to let him do so, but most times a signature is required. The other side will also sign their copy of the contract.
Once both parties have signed contracts, the lawyers may exchange. The buyer’s solicitor will normally transfer a deposit to the seller’s solicitor at the time of exchange and this deposit is usually 10% of the purchase price. It is important to know that once the contracts are exchanged, any non-returnable deposit paid is likely to be at risk if the buyer does not proceed with the purchase.
Exchange of contracts is, therefore, when you become committed to buying and the seller commits to selling to you. The subsequent completion of that contract is the actual sale and at that time the remaining purchase monies are paid over to the buyer’s solicitor by your solicitor and you will receive the keys. Now you own the place!
How long do exchange of contracts take?
Exchange of contracts usually takes between 4 and 8 weeks from the date the purchase is agreed. Most contracts for the purchase of a modern freehold property are no more than a standard piece of double-sided A4 paper with the names of the parties, the title number and the purchase price included. However, the background work undertaken during the conveyance can be more time consuming to complete.
Related Articles:
Download our Free First Time Buyers Guide
Recent posts
Delayed Start Mortgages
Today
The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers.
Green Mortgages | Rewards and Benefits
2 days ago
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
When will mortgage rates fall further?
12 days ago
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
Lloyds boost lending for first-time buyers
19 days ago
Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.
As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more.
The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.
Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.
Nationwide ease criteria for first-time buyers
22 days ago
Nationwide ease their ‘Helping Hand’ mortgage designed to help first-time buyers get onto the property ladder by allowing them to borrow up to six times their income.
More information
Trusted by
