You've put in your offer, which the seller has agreed to, and/or accepted the offer put in by your buyer. Your appointed conveyancing solicitor has completed the searches and ironed out all the legal glitches to do with the legal ownership of the home you are selling and also the one that you are buying. You've filled in the requisite forms, such as the Property Information and the Fixtures and Fittings forms and all parties are fully lined up to move on to the next stage.
You, and any co-owner with whom you are selling and/or buying the property, will be asked to sign a contract - one for the property you are selling, one for that which you are buying.
The parties you are selling to and buying from will each sign their individual contracts. Upon accomplishment of that process, your conveyancing solicitors in the chain will swap the legal contracts, which is the obviously simple definition of the term ‘exchanging contracts'.
It is at this point that you cannot back out of selling and/or buying the properties named in the contract as the process is a legally binding one.
To renege on this contract in any way will make you liable to possible legal action and financial recompense to the injured parties.