Buying and selling a house can be confusing. Exchange of contracts and completion are the final stages of the process with buyers and sellers both aiming to get to this as soon as possible. This stage brings security that a sale will no longer fall through. So what exactly is exchange of contracts, we take an in depth look and explain in detail everything you need to know.
Before exchange of contracts, neither side has a legal obligation to buy or sell the property. Either party can pull out without any penalty (except for any deposit on agreeing offers).
Both buyer and seller sign identical contracts but only when they are formally exchanged does the deal become legally binding. Between exchange of contracts and completion sizeable penalties will be incurred if one party pulls out. However, it is rare for anyone to pull out after exchanging contracts. In practical terms, this is when you can relax and be fairly sure your sale/purchase will go through.