A contract is a document that describes the agreement under which a property will change hands. It should contain standard conditions that are attached to the sale of the property. However, depending on the property being purchased, it could potentially contain other conditions too. The solicitors acting on behalf of the buyer and seller respectively would read through the contract to see if anything unusual has been included. If so, they may request that changes are made or that certain conditions are removed.
If certain items of furniture or white goods are to be left at the property, a list of these should be included with the contract. Queries may be raised if the two parties agreed for something to be left and it does not appear on the list, for instance.
Once both parties are happy with the contracts, they can be exchanged. Up to this moment, it is possible for either or both parties to withdraw from the sales process. There would be no fees incurred for backing out by the buyer or the seller. However, once contracts are exchanged, both parties are legally bound to go ahead with the sale. That said, it is possible to pull out, although there are hefty penalties for doing so. These can involve 10% of the purchase price – a huge sum to lose if you change your mind at this stage. It is the reason why so few people go back on their decision once they have signed and exchanged the contracts for the sale of the property in question.