What does exchange of contracts mean?

This is when a legal relationship is created between the Seller and Buyer, often referred to as the “point of no return” i.e. it is not easy to change your mind. Until such either party can withdrawn from the transaction with out penalty. Therefore we can only exchange contracts when we consider that the title of the property is satisfactory. It is reaching this point which takes the longest. However we cannot proceed at the expense of the necessary paperwork which must be in place and you will have to be patient. Prior to exchange of contracts either party may withdraw from the transaction without penalty. Following exchange a legal relationship has been created and parties who withdraw face severe financial penalties.