Exchange of contracts
The moment a property contract becomes legally binding, when buyer and seller exchange signed copies and the buyer pays a deposit.
- Makes the sale binding, subject to any cooling-off period
- Usually requires a deposit, often up to 10%
- Your finance and checks should be in place first
How it works
Each side signs a copy of the contract, the copies are exchanged through solicitors or conveyancers, and the deposit is paid. The contract sets the price, the settlement date and any special conditions.
Before you exchange
Confirm your finance, finish due diligence and have a solicitor review the contract. After exchange, pulling out can cost your deposit.
Many investors exchange with a reduced deposit or a deposit bond. Agree this with the vendor and your solicitor before exchange, not after.
Common questions
Is a 10% deposit always required?
No. It is common in NSW, but a smaller deposit can be negotiated.
What happens after exchange?
The cooling-off period runs if it applies, then the contract moves to settlement on the agreed date.
Related terms
Sources
General information only. It does not consider your objectives, financial situation or needs, and is not financial, credit, tax or legal advice. Rules change, so check current law and get advice from a licensed professional before acting.