Settlement

Settlement is the day ownership moves. The money is exchanged, the title transfers into your name, and the property becomes yours.

For most buyers it is also the least visible part of the purchase. The work happens between conveyancers, lenders and the electronic settlement platform, and the first many buyers hear of it is a message saying it is done. That is usually how it should feel. It is worth understanding what is happening underneath, because the things that go wrong here tend to be timing problems, and timing problems have deadlines attached.

Key takeaways

• Settlement is a date in your contract, not a formality. What happens if it is not met depends on the contract and the state, so know your position before the week arrives.
• The final figure is not the purchase price. Adjustments for rates, water and any owners corporation or body corporate levies shift the amount you actually pay on the day.
• Check the property before settlement, not after. Once it has settled, your options narrow considerably.

What actually happens on settlement day?

Funds move, the transfer is registered and the title passes to you. Most settlements in Australia are now completed electronically rather than in person, so there is usually no meeting to attend. Your conveyancer and your lender complete it between them, and the agent releases the keys once it is confirmed.

Why is the amount different from the price I agreed?

Because costs attached to the property are split between seller and buyer at the settlement date. Council rates, water and any strata, owners corporation or body corporate levies are apportioned, so whoever has paid ahead is credited and whoever has not is charged.

The settlement statement sets this out line by line. It is worth reading rather than skimming, because it is the document that tells you what you are actually paying and why.

What if settlement runs late?

That depends on your contract and on the state. Contracts commonly deal with late settlement, and the consequences can differ sharply depending on which side causes the delay and how long it runs. Some states and contracts provide rights to extend; others are stricter.

The practical point is that this is governed by terms agreed when you signed, so it is worth understanding them before the settlement week rather than during it.

What should I check before it settles?

That the property is in the condition the contract requires, and that anything agreed to be included is still there. Where a tenant is involved, whether the property is being handed over vacant or subject to the tenancy is a contractual question, not an assumption.

A pre-settlement inspection is the moment to raise a problem while raising it still achieves something.

The guides below

They cover how settlement timing works in a contract, what a settlement statement is, which adjustments commonly appear, vacant possession and tenanted property, and extension rights where the contract provides them.