What Happens on Completion Day? Exchange, Completion and the Gap Between

Exchange of contracts is the moment a property sale becomes legally binding. Completion is the day the money moves, the seller hands over the keys and the buyer becomes the owner. Between the two there is usually a gap of a few weeks, which GOV.UK says is often 2 to 4 weeks, though they can happen on the same day.

Exchange and completion: the difference

• Exchange of contracts: buyer and seller swap signed contracts through their solicitors. From that moment both are legally bound to go ahead, and the completion date is fixed. The buyer pays the deposit.
• Completion: the buyer's solicitor sends the rest of the money to the seller's solicitor, the seller's mortgage is paid off, ownership passes to the buyer and the keys are handed over.

Before exchange, either side can usually pull out without a legal penalty. After exchange, pulling out is a breach of contract.

What happens at exchange of contracts

Before exchange, your solicitor will normally need the searches back, the seller's answers to enquiries, your mortgage offer checked, the contract and mortgage deed signed by you, and your deposit in their account. In a chain, every buyer and seller in it has to be ready, and everyone agrees one completion date.

On the day, the solicitors speak by phone, confirm the contracts are identical, agree the completion date and treat the contracts as exchanged. They then post or send the signed contracts to each other. The buyer's deposit is usually sent to the seller's solicitor.

There is no fixed time of day for exchange. It happens once the last person in the chain is ready, which is why you may wait by the phone for most of a day.

Three things change once contracts are exchanged:

• You are bound. A buyer who pulls out can lose the deposit and be liable for the seller's further losses. A seller who pulls out can face a claim for the buyer's losses, or a court order to go ahead with the sale.
• The date is fixed. Book removals now, not before.
• Insurance. Under the Standard Conditions the seller keeps the risk until completion, unless your contract says otherwise. GOV.UK still advises buyers to arrange buildings insurance by exchange, and many lenders require it. Your solicitor will tell you when yours needs to start. For a flat, the building is usually insured by the landlord; your solicitor will check.

How long between exchange and completion?

GOV.UK says completion often comes 2 to 4 weeks after exchange. The gap gives everyone time to book removals, for the buyer's lender to release the mortgage money and for the seller to move out.

Exchange and completion can also happen on the same day. That is more common with no chain, or when a buyer is moving out of rented accommodation. The drawback is that nobody is bound until the day itself, so removals are booked with no binding contract behind them. Your solicitor can talk through whether it suits your move.

What happens on completion day

Completion day runs to the movement of money, not to a clock. In a chain, money moves up the chain one sale at a time, so the people at the bottom complete first.

If you are buying:

1. Your lender sends the mortgage money to your solicitor, who has already asked for it before completion day.
2. Your solicitor sends the full balance to the seller's solicitor by same-day bank transfer.
3. The seller's solicitor confirms the money has arrived and tells the estate agent to release the keys.
4. You collect the keys from the estate agent. GOV.UK says keys are often handed over around lunchtime, but it depends on when the money arrives along the chain.

If you are selling:

1. You move out and leave the keys with the estate agent, along with anything you agreed to leave on the fittings and contents form.
2. Your solicitor receives the buyer's money and confirms completion.
3. Your solicitor pays off your mortgage and, if you have authorised it, the estate agent's fee.
4. The balance is sent to you, or on to your own purchase if you are buying on the same day.

Completion-day checklist

Buyers, before the day:

• Buildings insurance in place from the date your solicitor advises, if you are buying a freehold.
• Contract, mortgage deed and Stamp Duty return signed and back with your solicitor.
• The balance of your money sent to your solicitor in good time, as they ask.
• Removals booked for completion day, with some slack in the timing.
• Ask the estate agent how and where you will collect the keys.

Buyers, on the day:

• Keep your phone on for your solicitor's call to say you have completed.
• Collect the keys, then take meter readings and photos when you arrive.
• Tell your energy and water suppliers you have moved in.

Sellers, before the day:

• Packed, with removals booked to leave in good time.
• Keys, alarm codes and any manuals ready for the estate agent.
• Fittings and contents left exactly as agreed on the form.

Sellers, on the day:

• Take final meter readings and give them to your suppliers.
• Hand the keys to the estate agent.
• Keep your own home insurance until your solicitor confirms completion.

Our moving house checklist covers the weeks before the move as well.

What can go wrong between exchange and completion

Most completions go through on the agreed day. When they do not, it is usually because money is late somewhere in the chain. Most home sales use the Law Society's Standard Conditions of Sale (fifth edition, 2018 revision), and your contract sets out what happens if someone is late:

• Late money on the day. Under the Standard Conditions, if the money arrives after 2pm, completion counts as happening on the next working day when working out any compensation for late completion, unless the delay is because the seller had not moved out by 2pm.
• Late completion. The side causing the delay usually has to pay compensation to the other for each day of delay, worked out at the rate set in the contract.
• Notice to complete. If one side still has not completed, the other can serve a notice to complete. Under the Standard Conditions this gives 10 working days.
• Failing to complete. If a buyer still does not complete after that, the seller can usually end the contract, keep the deposit and claim further losses. If a seller fails to complete, the buyer can usually end the contract, get the deposit back and claim their losses, or ask the court to order the sale to go ahead.

These are the standard terms. Your own contract may change them, so ask your solicitor what yours says before you exchange.

After completion

For a buyer, your solicitor pays the Stamp Duty and sends the return to HMRC within 14 days of completion, then registers you as the owner at HM Land Registry. Registration happens after you have moved in and does not affect your right to live there.

For a seller, your solicitor sends the lender's confirmation that the mortgage has been paid off, so the charge can be removed from the register.

Questions people ask

Who moves first on completion day?

The bottom of the chain, usually a first-time buyer or someone with no property to sell. Money moves up the chain one completion at a time, so the top of the chain completes last.

Can a sale fall through on completion day?

It is rare, because both sides are bound from exchange. Delays are more common: a late mortgage payment or a delay further down the chain can push completion into the afternoon or the next day.

What time does completion happen?

There is no fixed time. It happens when the money has arrived and the seller's solicitor confirms it. GOV.UK says keys are often handed over around lunchtime.

Can you exchange and complete on the same day?

Yes. It is more common with no chain. Nobody is bound until that day, so it carries the risk that the other side pulls out at the last moment.

Ready to move?

Our guide to how long it takes to buy a house explains the stages before exchange. If you are moving home, see our solicitors for buying a house and solicitors for selling a house, or buying and selling at the same time. All our conveyancing services are listed in one place.

Sources

Exchange, completion, insurance and timings (GOV.UK, How to buy a home, updated 6 September 2019): gov.uk/government/publications/how-to-buy-a-home/how-to-buy

Seller's steps: gov.uk/government/publications/how-to-sell-a-home/how-to-sell-a-home

Standard Conditions of Sale (fifth edition, 2018 revision): lawsociety.org.uk/topics/property/standard-conditions-of-sale

Stamp Duty return within 14 days of completion: gov.uk/stamp-duty-land-tax

This is general information about buying and selling property in England and Wales, not advice on your contract. What happens if completion is late depends on the terms of your own contract. Stamp Duty Land Tax applies in England; a home in Wales pays Land Transaction Tax instead.