general

Exchange of contracts explained: what happens, who signs and the point of no return

What is exchange of contracts when buying or selling in England and Wales? Who signs, the usual 10% deposit, and what happens if you pull out afterwards.

4 min read
Last reviewed 4 November 2026
By Your Property Check team

Part 1 of 7

What exchange of contracts is

General information, not advice. We read the pages cited below on 4 November 2026, and they describe England and Wales. Scotland uses a different process.

Until exchange, a sale is only an agreement in principle. GOV.UK says "an offer is not legally binding in England and Wales until contracts are exchanged", and that your property is not legally sold until written contracts are exchanged with the buyer. At exchange, each side signs a final copy and sends it to the other. GOV.UK says "the agreement to sell and buy is then legally binding", and after that neither party can usually withdraw without paying compensation.

Part 2 of 7

Before and after exchange

Question	Before exchange	After exchange
Is anyone legally bound?	No. Citizens Advice says there is nothing in law to stop you changing your mind	Yes. Both sides are bound by the contract
Can the seller accept a higher offer?	The law does not prevent it, but see gazumping	Usually not without paying compensation
Can the buyer withdraw?	Yes, for example if a mortgage fails or a survey finds a problem	Withdrawing is likely to mean losing the deposit
Where is the deposit?	Not yet paid, apart from any holding deposit	With the seller's solicitor, held until completion
Who insures the building?	Not yet the buyer	The buyer should arrange cover from exchange

Part 3 of 7

Who signs and what the contract says

The seller's solicitor or conveyancer drafts the contract. GOV.UK says it must cover the sale price, property boundaries, fixtures and fittings, legal restrictions or rights, planning restrictions, services such as drainage and gas, and when the sale will complete. When both sides are happy, each signs final copies and they are exchanged.

Citizens Advice says the buyer's solicitor needs to be satisfied with the enquiries, any survey must be dealt with, the formal mortgage offer must be in hand, deposit arrangements made and a completion date agreed. See our guide to what a buyer's conveyancer checks for the stages leading up to this point.

Part 4 of 7

The deposit

Citizens Advice says the deposit is paid on exchange, "a few weeks before the purchase is completed". It is often 10% of the price but can vary. We found no source that sets 10% as a legal rule, so treat it as common practice and check your contract. On a £300,000 sale, a 10% deposit would be £30,000, which is arithmetic on that common figure and not a requirement.

The seller's solicitor receives the deposit at exchange and holds it until completion. Do not confuse it with the holding deposit, which Citizens Advice says is usually £500 to £1,000, paid to the agent after an offer is accepted and repayable if the sale does not go ahead.

Buyers can use the deposit from their current home if they are selling, borrow from relatives or take a bridging loan. Citizens Advice warns bridging loans carry high interest, so check the cost first.

Part 5 of 7

Time between exchange and completion

Citizens Advice says exchange can take up to seven weeks from the offer being accepted, and that completion typically follows about four weeks later, though it can be earlier. The completion date is written into the contract. Our glossary entry for exchange and completion set out the two terms.

On completion, GOV.UK says the buyer's solicitor transfers the money. The seller's solicitor then pays the mortgage, any secured debts, stamp duty if you are buying another property, outstanding agent fees, service charges where relevant and their own fee, and sends the balance to you. You must leave the property in the state agreed in the contract.

Part 6 of 7

Can you pull out after exchange?

Withdrawing is possible in the sense that nobody can physically stop you, but it is costly. Citizens Advice says that if you drop out after exchange you are likely to lose your deposit. GOV.UK says neither party can usually withdraw without paying compensation. Whether a seller or buyer who defaults owes more than the deposit depends on the contract, so ask your solicitor before you act.

Before exchange the position is different. Either side can still walk away, and you may have already paid for valuations, surveys or legal work. Citizens Advice suggests asking your solicitor what you pay if the sale falls through before exchange.

Part 7 of 7

A sensible checklist

Check the completion date and what is included in the sale.
Confirm the deposit amount and who holds it.
If you are the buyer, work out the stamp duty due with our stamp duty calculator.
Arrange buildings insurance from exchange if you are the buyer.
Tell your utility providers and the council tax office when you are leaving, if you are the seller.
Ask your solicitor to explain any clause you do not understand.

This page is general information, not advice. Your solicitor can confirm how these rules apply to your contract.

Our take

Treat exchange as the point of no return

Until exchange nothing is legally binding, and Citizens Advice says withdrawing afterwards is likely to cost you the deposit. So we think the work belongs before exchange: the survey dealt with, the mortgage offer in hand, buildings insurance arranged and the stamp duty figure known. Ask your solicitor about any clause you do not understand.

What Your Property Check adds: our stamp duty calculator covers SDLT, LBTT and LTT, including first-time buyer and additional-property rates. Before you offer, OfferCheck gives a plain-English risk report on the address, with every figure sourced.

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Our opinion, drawn from the facts on this page: not advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.

Questions, answered

Frequently asked questions

What is exchange of contracts?

The point where buyer and seller each sign a copy of the contract and swap them. GOV.UK says the agreement to sell and buy is then legally binding in England and Wales.

How much deposit is paid on exchange?

Citizens Advice says it is often 10% of the price but can vary. We found no source that makes 10% a legal rule, so check your contract. The seller's solicitor holds it until completion.

Can you pull out after exchange of contracts?

You are legally bound once contracts are exchanged. Citizens Advice says that if you drop out you are likely to lose your deposit, and GOV.UK says neither party can usually withdraw without paying compensation.

How long between exchange and completion?

Citizens Advice says completion typically follows about four weeks after exchange, though it can be earlier. The date is set in the contract.

Who should arrange buildings insurance?

Citizens Advice says a buyer should arrange cover from the exchange date, because they become responsible for the property once contracts are exchanged.

Where this comes from

Sources

Last reviewed 4 November 2026 by the Your Property Check team. This page is general information, not legal, tax or financial advice. For your own situation, speak to a conveyancing solicitor or another qualified professional.