Once you agree to sell or purchase a property you may find the estate agents and your solicitors start to use phrases that are unfamiliar to you. Never be concerned about asking for an explanation of the meaning behind the words.

A common misunderstanding with buyers and sellers is what takes place at the point of exchange and what takes place at completion.

Put simply, exchange of contracts is the point at which you enter into a legally binding contract to sell or purchase the property. If either party were to withdraw from the transaction after this point there would be financial penalties for doing so and the buyer would stand to lose their deposit. The deposit paid on exchange is generally 10% of the purchase price. The completion date is entered into the contract at exchange and cannot be changed without agreement of all parties to the contract.

Completion is when the purchase price for the property is transferred from the buyer’s solicitors to the seller’s solicitors and the transaction is legally ‘completed’. Keys will generally be released to the buyers on the day of completion once the seller’s solicitors have confirmed they have received the funds.

There is no set time period between exchange and completion as the completion date can be any working day that the seller and buyer are happy with. Often people are keen to complete as soon as possible so it is common to have a week in between exchanging contracts and completing, which allows for the time required to get any mortgage advances drawn down.