We sat down with Victor Erzikoff, Sales Administration and Client Liaison Manager at Property Investment Consultancy Meridian Australia to chat about the often complex property settlement process.

Property settlement overview

What is property settlement?

Property settlement is a legal process that occurs after the price of the property has been negotiated and agreed on between buyer and seller, and the contracts have been signed and exchanged between both parties.

The process for settlement is facilitated by the buyer’s solicitor, financial representatives and of the seller of a property. The end goal of the settlement process is having the ownership of the property to be successfully passed from the seller to the buyer, who will then legally own the property.

How long is the settlement process?

The time frames for property settlement can vary. After both parties have agreed to a price and contract terms, the settlement period will then be included in the contract of sale, where the seller will specify a timeframe. Most commonly settlement occurs between 30 to 90 days after the exchange of contracts, however, this period can be shorter or longer depending on the seller’s preference.

What occurs on settlement day?

On settlement day, a buyer’s settlement agent (solicitor or conveyancer), will meet with their lender and the seller’s representatives at a set time to exchange documents. From there they simply organise for the balance of the purchase price to be paid to the seller.

As part of this process, the buyer’s lender will register a mortgage against the title of the property and will provide the funds to proceed with the purchase.

Also as part of this process, a buyer’s solicitor or conveyancer will verify that any existing mortgage on the title to the seller is discharged and that any third party or person who has rights over the property (i.e. a caveat) is removed. They will also ensure that all clauses on the sales contract are fulfilled and the transfer of land and mortgage is registered with the title office in a buyer’s state or territory.

Tips for before settlement

For prospective buyers, the lead up to settlement day can be a busy time, from communication with solicitors to financial representatives and ensuring all the boxes are ticked before the settlement occurs.

We recommend using the below checklist for preparing for settlement day:

  • Preparation is key and first, you must have contacted a solicitor or conveyancer to act as your agent on the day.
  • Another simple yet vital aspect that can’t be overlooked is to ensure the sales contract is signed and dated with the correct settlement date, which was agreed to by both the buyer and seller.
  • Communicate with your financial representative to ensure all the money needed to complete the sale will be available and arranged for the settlement date, this not only includes the settlement sum/ balance but a buyer also needs to factor in stamp duty, lenders mortgage insurance (LMI) and other fees or charges.
  • The buyer must arrange for building and contents insurance to commence effective from the purchase date.
  • The buyer has had an opportunity to complete a final inspection of the property.

The final inspection

Before settlement, the buyer will have the opportunity to do a final inspection of the property. Often this is done the day before or the morning of the settlement, however, it can be conducted earlier or via zoom/video call, depending on the location of the property in relation to the buyer.

The seller must hand over the property in the same condition as when it was sold. A key aspect to review on the final inspection include, appliances, heating/cooling systems, the structure, fittings, garage door controls and that all locks/keys are working.

If a buyer neglects this process or misses certain aspects on the final inspection, then this will be a cost incurred by the buyer after settlement has occurred.

If you are uncertain of certain aspects mentioned above you can always utilise the services of a building inspector.

What happens at settlement?

After settlement

After settlement, the financial representative/lender will draw down on the loan of the buyer. This means the lender will debit the amount that has been paid at settlement from the buyer’s loan account.

The buyer is then responsible for paying stamp duty, which is paid on the settlement date, and may be added to the loan amount/mortgage (depending on the buyer’s serviceability). The title to the property won’t be transferred to the buyer’s name/s until stamp duty has been paid.

The seller is responsible for rates and other council fees up to and including the day of settlement, but after this, the buyer will need to pay these costs.

Once the settlement is completed, the buyer’s can collect the keys from the agent and possession of the property can be taken, or for the buyer/s to take possession of their investment property.


Looking to get the property investment conversation started? Book your Property Investment Strategy Call with us today here.

Or, just looking to stay in the loop? To stay up-to-date make sure you join our Property Market Pulse Newsletter here.

Victor Erzikoff – Sales Administration and Client Liaison Manager
Phone: (02) 9939 3249
Email: victor@meridianaustralia.com.au
Website: meridianaustralia.com.au

Connect with us

LinkedIn: http://bit.ly/Meridian-Australia-Linkedin
Facebook: http://bit.ly/Meridian-Australia-Facebook
Instagram: http://bit.ly/Meridian-Australia-Instagram 

[1] NAB
[2] PEXA

Disclaimer: When considering purchasing property, it is always prudent to seek the advice of an appropriately qualified professional to determine which strategy is most appropriate for your circumstance.