Until you exchange contracts, neither side has any legal obligation to buy or sell the property, and both can pull out without any penalty (or only the deposit on agreeing offers, if one was made). Both buyer and seller sign identical contracts, but only when they are formally exchanged by the solicitors does the deal become legally binding. Between exchanging contracts and completion, either side will almost certainly pay major penalties if they pull out. However, it is extremely rare for anyone to pull out after exchanging contracts, and in practical terms, this is when you can breathe a sigh of relief – you can be pretty sure your house sale will go through.

When do I exchange contracts?

You usually exchange contracts between 7 and 28 days before completion – although you can exchange contracts on the day of completion (see below). Because exchanging contracts means you are legally committed to buying the property, you have to make sure you have everything in place before hand, so that nothing can go wrong.

Can I exchange and complete on the same day?

It is possible, increasingly common, and has certain advantages – it certainly speeds the process up, and means you don’t have to pay a deposit on exchange of contracts. However, there are downsides – it is incredibly stressful, and you don’t definitely know that you are moving until the day that you move, which makes arranging removals men and forwarding post more complex. If anything does go wrong, you don’t have any time to put things right. You will need to have your house packed up with the removals men ready, while you are waiting to hear that contracts are being exchanged. If you are keen to go for this, the things to consider are:

• It is much less riskier if you and the seller are chain-free, so there is no one else to mess things up
• It is easier if you are a cash purchaser, so you don’t have to worry about transferring money from the mortgage lender
• Some mortgage lenders are happy with exchanging and completing on the same day, but others require a minimum period (such as five working days) between
• You and the mortgage lender should transfer the funds to your solicitor the day before, to ensure there are no money transmission problems