Understanding property contracts: A simple guide for buyers and sellers

Buying or selling a property is one of the biggest financial decisions you’ll make, so it’s important to understand the legal documents that make the process official. A key part of any sale or purchase is the property contract, which sets out the terms agreed between the buyer and the seller.

At Dean Wilson LLP, our residential conveyancing team helps clients across Brighton, Hove and the wider Sussex area navigate each step of the process with clarity and confidence.

What is a Property Contract?

A property contract is a legally binding agreement between the buyer and the seller that outlines all the essential details of the transaction. It ensures that both sides understand their obligations and protects each party once the sale becomes legally enforceable.

The contract typically includes:

• Parties’ information: The full names and addresses of both the buyer and the seller.
• Property details: The full address and title number of the property being sold.
• Financial terms: The agreed purchase price and the deposit amount, which the buyer usually pays on exchange.
• Completion date: The agreed date when the final transfer of ownership takes place.  This will be added by your conveyancer when the contract is exchanged, but the date will be agreed with you first.

The process of a Property Contract

Understanding the process helps you know what to expect and when to act. Here’s how it typically works:

1. Preparation: The seller’s solicitor prepares a draft contract based on the title documents for the Property being sold, and the initial agreement for sale, as agreed with the Estate Agents.
    
2. Review and negotiation: The buyer’s solicitor reviews the draft and requests any clarifications or changes.
    
3. Signing: Once the terms are agreed, both parties sign identical copies of the contract.
    
4. Exchange of contracts: The solicitors formally exchange the signed copies. At this point, the agreed completion date is inserted into the contract, and the contract becomes legally binding.
    
5. Deposit payment: The buyer pays the agreed deposit to their solicitor, prior to the exchange of contracts.  On exchange of contracts, the deposit will either be sent to the Seller’s solicitor or will be held by the Buyer’s solicitor, but it will be held to the order of the Seller’s solicitor, who can demand that the deposit is paid over at any time up to the completion date.
    
6. Completion: On the agreed date, the remaining funds are transferred to the Seller’s solicitor, and the buyer receives the keys.

What happens after the exchange

Once contracts have been exchanged, neither party can withdraw without potential financial penalties. The period between exchange and completion is often a few weeks, which allows time for final checks and arranging removals.  Buildings insurance should be placed on risk from the date on which contracts are exchanged, unless this is not required, for example, if you are purchasing a flat and the freeholder insures the building.

After completion, the buyer’s solicitor will register the change of ownership with the Land Registry.

Why understanding the Contract matters

A clear understanding of your contract helps avoid delays and misunderstandings. It ensures that both parties know their responsibilities, the key dates and any conditions attached to the sale. Whether you are buying a flat in Brighton Marina or selling a terraced house in Hove, this knowledge helps make the process smoother from start to finish.

How Dean Wilson LLP can help

Our residential conveyancing team supports buyers and sellers across Brighton and Hove with practical, reliable advice. We explain the legal steps in plain language and keep the process moving so you can focus on your move.

If you’re buying or selling and would like expert guidance, please get in touch using the link below.

Frequently Asked Questions

Is it possible to exchange and complete on the same day?

Yes. It is sometimes possible to exchange and complete on the same day, but it is not always recommended. Same-day exchange and completion can create pressure for all parties involved because everything must be ready in advance, including signed paperwork, mortgage funds and removal arrangements.

Many buyers and sellers in Brighton and Hove prefer at least a short gap between exchange and completion so they can confirm timings and prepare for moving day. Your solicitor will discuss the best approach for your circumstances.

Do buyers always have to pay a deposit on exchange?

Yes. In most cases, the buyer pays a deposit when contracts are exchanged. The standard deposit is 10 per cent of the purchase price, although this can sometimes be negotiated. 

What happens if something goes wrong after contracts are exchanged?

Once the contract is legally binding, withdrawing without a valid legal reason can lead to financial penalties. For buyers, this could include losing the deposit. For sellers, it can mean compensating the buyer for losses. This is why the contract stage is so important and why your solicitor ensures everything is in order before exchange.