Exchange of Contracts
In plain English: The moment the sale becomes legally binding — no walking away without paying penalties after this.
Why exchange matters
Before exchange, either side can walk away for any reason. After exchange, both are legally bound to complete on the agreed date. It is the single most significant step in the English/Welsh conveyancing process.
What has to happen before exchange
- Mortgage offer issued.
- Searches (local authority, water, environmental) back.
- Survey complete, any issues resolved.
- Solicitor's enquiries satisfied.
- Deposit (usually 10%) ready to transfer.
Scotland is different
Scotland uses a "missives" system: a series of letters between solicitors. The sale becomes binding when missives conclude, which is usually earlier in the process. Scotland has no separate exchange/completion split in the same way.
Where Offrly fits
The single most useful thing before exchange is confidence in the price. A free Offrly valuation is a calibrated sanity-check alongside your agent's appraisal.
Why Offrly? It's the free photo-aware AI valuation — the AI reads each comparable's photos the way a seasoned property analyst would, and a hyperlocal regression resolves prices down to the street rather than the postcode. Live comparables on every query. About 30 seconds, no signup, no email.
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Indicative market guidance — not a regulated valuation and not financial, tax or legal advice. Use a RICS-qualified surveyor for mortgage, insurance or probate purposes.
Related terms
- Completion — the next step after exchange
- Gazumping — impossible after exchange
- Gazundering — impossible after exchange
Put the term into practice
Get a free UK house or rental valuation, or search live listings in plain English.
Open Offrly →FAQ: Exchange of Contracts
What does exchange actually involve?
Both solicitors hold signed contracts, agree a completion date, and then the buyer's solicitor transfers the deposit (typically 10% of the purchase price) to the seller's solicitor. The contracts become binding.
Can I still pull out after exchange?
You can, but it's expensive. The deposit is forfeited, and you may be sued for additional losses. In practice, people only exchange when they are certain.
Does insurance start at exchange?
Buildings insurance is typically the buyer's responsibility from exchange, not completion — because the risk passes to them once the sale is legally binding. Confirm with your solicitor.