Settlement is the moment the buyer’s money goes to the seller, the seller’s mortgage is paid out, and the title moves to the buyer. Today it almost always happens online, through an electronic settlement platform called PEXA, run by the conveyancers, solicitors and banks involved. Nobody meets in a room any more.
How long from contract to settlement?
The settlement date is set in the contract and can be negotiated. In NSW it is usually about six weeks after exchange. Elsewhere 30 to 90 days is common, and off-the-plan purchases settle when the building is finished. A longer period gives a buyer time for finance; a shorter one suits a seller who has already bought.
What happens on the day
- In the days before, each side’s representative builds the settlement in PEXA: the price, adjustments for rates and levies, loan funds, stamp duty and fees.
- Banks and representatives sign the workspace digitally.
- At the booked time, PEXA moves the money between accounts and lodges the transfer and mortgage documents with the land titles office at the same moment.
- Your conveyancer confirms settlement and tells the agent, who releases the keys.
The PEXA fee (about $146 per transaction, as quoted by Canstar from OpenAgent) is one of the disbursements on your conveyancer’s bill.
What you need to do
- Finance: make sure your lender has everything it needs well before the date
- Insurance: ask your conveyancer when the risk passes to you under your contract, and have building insurance in place from then
- Final inspection: check the property is as agreed. See our final inspection checklist.
- Connections: book electricity, gas, internet and water accounts to start on settlement day
- Be reachable: answer your phone and email on the day in case something needs signing
If settlement is delayed
Delays happen, usually because finance or paperwork is late. Most contracts let the other side charge interest or costs for late settlement, and after a formal notice to complete the contract can be ended. Your conveyancer will keep you posted; ask early if you think anything on your side could run late.
Western Australia
In WA the person who runs your settlement is called a settlement agent. The process is the same. Compare settlement agents in Western Australia.
Next: what a conveyancer does and what it costs.
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