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Settlement: What Happens and When to Get Money Ready

Settlement is the final step of buying a property. It’s when you pay the balance owing and receive keys to your new home. Understanding the process and what to expect helps you prepare.

What is settlement?

Settlement is the legal transfer of property ownership. Your conveyancer (lawyer) manages the process, coordinating with the seller’s conveyancer, your lender, and the government land titles office.

Timeline:

Most residential property sales settle 6–8 weeks after contracts are signed. It can be faster (if both parties agree) or slower (if there are complications).

Your responsibility:

You need to provide the settlement amount (purchase price minus deposit already paid) to your conveyancer by a specific date (usually 2–3 business days before settlement).

Example:

Purchase price: AUD 600,000 Deposit paid upfront: AUD 60,000 (10%) Remaining balance: AUD 540,000

Your lender will approve this AUD 540,000 and fund it directly to your conveyancer. You typically don’t touch the money—it flows from lender to conveyancer to seller’s conveyancer.

What you pay:

On settlement day, you need to provide:

  1. The balance of the deposit (if deposit was paid in stages)
  2. Your own legal fees (conveyancing: AUD 800–AUD 1,500)
  3. Your own search fees (title search, land tax check: AUD 100–AUD 300)
  4. Stamp duty (AUD 10,000–AUD 50,000+, depending on price and state)
  5. Money for rates and other adjustments (pro-rata portions)

Most of this is coordinated by your conveyancer, who produces a “settlement statement” showing exactly what you owe.

Rates adjustment:

If the seller has prepaid rates (local council tax) or has outstanding rates, these are adjusted at settlement. If rates are AUD 2,000/year and settlement is mid-year, you might pay the seller AUD 1,000 for the unpaid portion they’ll leave behind.

Mortgage release:

Your lender will send funds directly to your conveyancer with instructions: “pay the seller, pay the conveyancing costs, then transfer the remaining funds to the new mortgage account.”

From your perspective: your lender deposits the agreed loan amount, settlement is completed, and your new mortgage begins.

On settlement day:

  1. Your conveyancer receives funds from your lender
  2. Both conveyancers coordinate the transfer at the land titles office
  3. Once the transfer is registered, you own the property
  4. You get the keys
  5. You can move in

This typically happens during business hours. You don’t attend settlement yourself; your conveyancer handles it.

Issues that can delay settlement:

  • Missing documents from the seller
  • Title issues (unresolved liens or encumbrances)
  • Lender not funding on time
  • Last-minute disputes about adjustments
  • Pest inspection finding issues that weren’t resolved

If settlement is delayed, the seller might charge you “settlement delay interest” (usually the agreed interest rate on the purchase price). This incentivizes timely settlement.

What you need to have ready:

  1. Settlement funds: coordinate with your lender to ensure they’re ready to fund
  2. ID and documentation: your conveyancer will ask for these upfront
  3. Final walkthrough: inspect the property on settlement day to confirm the seller has vacated and property is as agreed
  4. Utilities: arrange to change electricity, gas, internet to your name after settlement
  5. Insurance: ensure home and contents insurance is active from settlement day

After settlement:

  1. You own the property
  2. Your mortgage begins (principal + interest repayments start)
  3. You’re responsible for all costs (rates, maintenance, insurance)
  4. You can renovate, rent it out, or live in it

Common surprises:

  1. Settlement takes longer than expected (wait for lender to fund)
  2. Adjustments are larger than anticipated (rates, water, body corporate)
  3. The property has issues the inspection missed (you own it now; too late)
  4. Utilities take weeks to transfer (plan ahead)
  5. Moving costs are higher than budgeted (get quotes early)

Pro tips:

  1. Have your conveyancer explain the settlement statement line-by-line
  2. Do a final walkthrough the day before settlement to confirm everything is as agreed
  3. Arrange moving company well in advance
  4. Change utilities to your name before settlement to avoid gaps
  5. Have insurance effective from settlement day (not after)
  6. Budget 10%+ extra for surprise costs at settlement

Settlement is the final step, and it’s mostly administrative. Your conveyancer manages it, and lenders fund automatically. You just need to ensure you have the funds ready and all documentation organized.

Once it’s done, the property is yours.