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What is property settlement?

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The Smart Booster Home Loan is our low rate home loan which allows you to boost your savings, build your equity and own your own home, sooner.

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When you purchase a property, the very last step that takes place before you can settle in is the property settlement. When you both buy and sell, you’ll have a set number of days for settlement to occur. Typically, settlement can range from 30 to 90 days, but it can generally be as flexible as you need it to be.

Before you purchase a home for the first time, it can be helpful to understand the property settlement process - what it is, how it happens, and what happens after. This way, you can understand the whole sale process and know what to expect.

What is property settlement?

Property settlement is the legal process in which the buyer takes legal and physical ownership of the property. The process is facilitated by both legal and financial representatives of the buyer and seller. Essentially, it’s the moment the property you purchase officially becomes yours.

The settlement period starts from the date the contract is signed and ends on the date agreed to as the settlement date. On the contract, you might see ‘30 days from contract date’ or ‘90 days from contract date’ for settlement, or even an actual date you would like it to occur.

In some cases, settlement is conditional upon other special conditions such as contemporaneous settlement or a subject to sale clause. In any case, all the conditions of the contract must be met before settlement can take place.

What happens before settlement?

Before settlement takes place, a few things will happen. Mainly, you can take the time to conduct a final inspection of the property to make sure it’s ready to be passed over to you.

The seller must provide the property to you in the condition it was sold. The final inspection is a chance for you to double-check and make sure you’re happy with the property’s condition. If you’re not satisfied with this, you can request for settlement to be pushed back until the seller fixes whatever issues you have. To organise the final inspection, you’ll need to go through your real estate agent.

At the final property inspection, things you could take note of include:

  • All the appliances (e.g. hot water system, heating and cooling, stove and oven, etc.) being in working order

  • The home’s structure, walls, light fittings, windows, floor, the pool (if applicable) and all other functions are in the same condition as they were when you bought the property - i.e. make sure there has been no damage to the property

  • Checking that the locks, keys, garage remotes, and any other security feature/s have been supplied to you and in working order

  • All chattels (e.g. furniture) have been removed from the property (unless agreed to be kept on the contract)

  • The house is reasonably clean, and there has been no rubbish left on the property

When buying a brand new home, you might also want to make sure the home is finished in its entirety and that any inclusions you paid for have been installed and are working.

If you’re not sure what to look for, you could organise for a building inspector to do a double-check of the property before everything is finalised.

What happens on settlement day?

When settlement day rolls around, there are a few things that will happen. First and foremost, at an agreed time and place, your legal representative (i.e. your solicitor/conveyancer) and your financial representative (i.e. your lender) will meet with the seller's representatives.

On your behalf, they will organise for the balance deposit, which is the difference between the purchase price and the deposit/s you’ve already put down, to be paid.

At this time, your lender will:

  • Register a mortgage against the title of your new property, and

  • Provide the funds to purchase the property

From your solicitor/conveyancer’s end, they will:

  • Check and see if any existing mortgage on the title to the vendor is discharged

  • Ensure that any caveats are removed

  • Double-check to make sure all relevant clauses on the contract are fulfilled

  • Check that the transfer of land and mortgage has been registered with the title office in your state/territory

What happens after settlement?

After settlement has taken place, congratulations! You are officially a homeowner. However, there are still a few things you will need to sort out before you can be done with the property’s settlement.

First thing’s first, you’ll receive confirmation from your conveyancer/solicitor letting you know settlement has occurred, including a statement of adjustment. Your lender should also send you a confirmation letter detailing your loan amount and repayment details. Once you’ve received confirmation of settlement, you can pick up the keys from your real estate agent and start moving into your new home.

On settlement day, you’ll need to make sure the land transfer duty or stamp duty (whichever applies) is paid. Not doing so will mean the title to the property isn’t transferred into your name. Stamp duty/land transfer duty must be paid by you directly to the relevant state/territory revenue office.

How can you prepare for settlement day?

If it’s your first settlement day and you want to be prepared for anything, here are a few tips that can help your settlement come and go as smoothly and efficiently as possible.

You should be prepared for the possibility things will go wrong, and have backup plans in place to be ready for this (not that it will happen - but unfortunately, in some cases, it can).

  • Make sure you’ve contacted a solicitor/conveyancer to represent you in the settlement process

  • Double-check the sales contract is signed and dated with the correct settlement date you want

  • Ensure you’ve organised the money you need to complete the sale and settle (i.e. money for stamp duty, lenders mortgage insurance if applicable, buying fees and charges, etc).

  • Consider having building and contents insurance effective from the date you purchased the property. This way, if anything is damaged before you officially move in, you’re still covered

  • Make sure you’ve completed a final inspection before settlement day to make sure everything is safe and sound

  • Be ready to move into your new home before settlement day rolls around i.e. have everything packed and movers organised so that you can settle in as quickly as possible

Still looking for a low-rate home loan?

From working out how much you can borrow to guiding you through the settlement process, our team at tries to make the home buying process easy to understand.

If you’re still on the hunt for a new home and haven’t sorted out your finance yet, why not take a look at a few of our super low rate home loans. With a range of options and features available we’ll help you make buying a home a little simpler.

Alternatively, talk to one of our lending specialists today to find out more about your options.

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About the article

As Australia's leading online lender, has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

Tags: home loan property settlement