First Time Buyer Guide

Exchange of contracts

Until contracts are exchanged, even an accepted offer can still change or fall through. Exchange is where that uncertainty ends, so the mortgage, money, legal work, insurance and completion date all need to be in a position you are prepared to commit to.

You will probably have signed the contract before exchange day, which can make it seem as though you have already committed. The signed copy is normally held by your conveyancer until everyone in the chain is ready and has given authority to exchange; only then do the conveyancers bring the contracts into force, often by telephone.

Before authorising exchange, you should have a valid mortgage offer and be satisfied with the survey, title, searches, enquiries, property forms, fixtures list and completion date. Your conveyancer should have the required money and signed documents, and the lender's conditions should be met.

Check the property and your plans have not changed. A further viewing shortly before exchange is useful where time has passed, work has been promised or condition and included items matter.

If the seller proposes a short deadline, ask why it is needed and which work is still outstanding. Mortgage, survey and legal work can sometimes run in parallel, but a faster timetable does not remove a lender's condition or a question that must be answered before you become bound.

If the mortgage offer may expire before completion

Check the exact expiry date and ask the lender or broker what an extension would involve. Depending on the lender and the time elapsed, it may require updated evidence, another valuation, a further assessment or a new application rather than a simple date change.

Make the deadline clear to the conveyancer, agent and chain before exchange. Do not enter a binding contract unless the conveyancer is satisfied that the mortgage funds should be available for the contractual completion date.

The exchange deposit

The contract often provides for a 10% deposit, although a lower amount may be agreed. It is part of the purchase price, not an extra charge, and is different from using “deposit” to mean all the cash between your mortgage and the price.

If your available cash is below the contractual figure, tell the conveyancer early, as a lower amount may need to be agreed and chains can sometimes pass deposit money upwards under the contract. The figure and the way it moves cannot be assumed from the mortgage loan-to-value.

When buildings insurance needs to start

In many standard freehold transactions, the contract passes the risk in the property to the buyer at exchange, and the mortgage lender may require buildings insurance from the same point. Ask the conveyancer when risk passes under your contract, then arrange acceptable cover to begin on that date.

If insurers will not offer cover, or will only do so with significant exclusions, tell the conveyancer and lender before authorising exchange. Find out whether the difficulty relates to flooding, subsidence, construction, claims history or another feature, as the answer may affect both the mortgage and your decision to buy.

If you are buying a leasehold property

The building is usually insured through a block policy arranged by the freeholder or management company. Ask the conveyancer to confirm that the policy meets the lender's requirements and whether you need any separate cover, so you do not buy duplicate buildings insurance.

Choosing the completion date

The date has to work across the chain and allow the lender and conveyancers enough time to move funds. Leave enough room for removals, tenancy notice and practical arrangements without creating an unnecessary period in which you are committed but do not yet own the home.

Exchange and completion can happen on the same day. That removes the gap but leaves no binding certainty for removals or notice until the moving day itself, and any last-minute issue can disrupt both steps. Whether it is suitable depends on how much flexibility the buyer, seller and the rest of the chain have on the day.

New-build contracts often complete “on notice”: you exchange with only an estimated build window and complete after the developer serves notice that the home is ready. The mortgage offer, long-stop protection and living arrangements need particular attention.

If an expected exchange does not happen

A proposed exchange date is still only a target until every conveyancer confirms that the contracts have been exchanged. If the call cannot go ahead, ask what was missing—authority, a signature, money, a lender condition, the completion date or another transaction in the chain—and when everyone expects to try again.

Until exchange is confirmed, do not treat the proposed completion date as fixed or make a non-refundable commitment that depends on it.

What changes after exchange

Both sides are legally committed to complete on the agreed terms. Failure can put the deposit at risk and create liability for losses or other contractual remedies. If a serious problem arises after exchange, contact the conveyancer immediately rather than trying to solve it directly with the seller.

This is the point to make non-refundable moving arrangements and give notice, allowing for the obligations and timing in your own tenancy or sale.

What to check at this stage

  • Read the report on title and contract papers before authorising exchange.
  • Ask the conveyancer to confirm that the mortgage offer is valid and all the purchase funds will be available.
  • Ask how much money must be with the conveyancer before exchange and transfer it in time.
  • Ask the conveyancer when buildings insurance must begin and arrange cover from that date.
  • Agree a completion date you can actually meet.
  • Consider a final viewing if condition or promised work needs checking.
  • Wait for confirmation of exchange before treating the date as fixed.