What is the difference between exchange and completion of contracts?
Exchange of contracts is when the two legal firms representing the buyer and seller swap signed contracts, and the buyer pays a deposit, usually 10% of the purchase price. At this point, an agreement to buy or sell a property becomes legally binding. Once everyone in the chain has exchanged, no one can back out of the deal.
The good news is that, when you do exchange contracts, the solicitors will agree a completion date. As legal firms can be sued if they fail to meet this date, they have a strong incentive to meet the deadline and so you can be fairly certain you will definitely complete on the day.
Completion is the final stage of the property sale/purchase transaction. It takes place when the seller’s solicitor confirms they are in receipt of the full purchase monies. Ownership is transferred from the seller to the buyer by the dating and transfer of title documents.
Vacant possession is given to the buyer by 1pm, unless otherwise agreed. Sellers should have left the property by 1pm on completion day. The buyer is given the keys, usually by the selling agent, and is free to move in. Completion signifies that ownership of and responsibility for the property has transferred from the seller to the buyer.