Exchange and completion: what is the difference and what stage of buying a property does each happen at?

Question: What is the difference between exchange and completion?

Answer: Expect it to take somewhere from three to six months to buy a property, once you have had your offer accepted.

During this time there are many hurdles to clear, and exchange and completion are the two big ones.

Put very simply, exchange is the point at which you have got your mortgage in place, had a survey, valuation, and council searches done, and formally agree to buy the property.

You must also put down a deposit, usually ten per cent of the value of the property — which you will forfeit if you change your mind.

Completion — possibly on the same day but more usually a week or two after exchange — is when you pay the balance and can finally start thinking about colour schemes and housewarming parties.

“Exchange involves the exchange of contracts that make the sale of a house legally binding,” says Chris Cady, director of Dexters estate agents in Westminster. “This means that before contracts are exchanged either the buyer or the seller can withdraw from the transaction.

“Completion is the date that the legal ownership of a property is transferred. After final checks and searches, the buyer’s lawyer will place the balance of the purchase money to the seller’s lawyer.

“After the funds are received, the transaction can be completed, and the estate agent can release the keys to the buyer.”