Settlement is the day the property legally becomes yours. The money moves, the title transfers, and you get the keys. Everything between signing the contract and that day is preparation for it.
What actually happens at settlement
Your lender pays the seller’s lender and the seller. The title is transferred into your name and registered with the state land titles office. Your loan starts. Rates, water and strata are apportioned so each side pays for the days they owned the place.
You are almost never in the room. Settlement is handled electronically between the two conveyancers and the two banks, usually in minutes. Your job is to have your side ready.
How long it takes
The settlement period is set in the contract, most commonly 30 to 90 days, with six weeks being a common middle ground. Longer suits a buyer who needs to sell first or arrange finance; shorter suits a seller who wants certainty.
It is negotiable before you sign and difficult to change afterwards. Agree a period you can actually meet, including the time your lender needs for formal approval.
What happens between contract and settlement
- Cooling off, where your state provides it. It does not apply to auction purchases.
- Deposit paid, usually 10%, held in the agent’s or conveyancer’s trust account.
- Finance approved. Your lender values the property and issues formal approval. This is the step most likely to go wrong.
- Searches and enquiries. Your conveyancer checks the title, zoning, rates and anything registered against the property.
- Final inspection, in the last few days, to confirm the place is as it should be.
- Settlement.
James Haywood
Financial Services Expert
“We always recommend that first home buyers use a good property solicitor for their first purchase. It can be the difference of a few hundred dollars in cost upfront. However, it could save you tens of thousands of dollars and heartbreak down the line if the person you use misses significant repairs that need to occur on your property.”
James Haywood – Director | Approved Finance
What it costs on the day
- The balance of the purchase price, less the deposit already paid.
- Stamp duty, the largest single cost for most buyers. First home buyers should check the concessions available in their state.
- Conveyancing and legal fees.
- Lender fees — application, valuation, settlement.
- Lenders Mortgage Insurance, if your deposit is under 20%.
- Adjustments for council rates, water and strata already paid by the seller.
- Building insurance, which most lenders require from the day you sign, not the day you settle.
What delays settlement
Almost always one of five things:
- Finance not formally approved in time. Pre-approval is not formal approval, and the valuation is assessed against the property, not just you.
- A valuation below the contract price. The lender funds a percentage of its valuation, so a shortfall has to be found in cash or renegotiated.
- Paperwork returned late by either side.
- Problems found at the final inspection.
- The other side’s chain — a seller whose own purchase is delayed.
Late settlement usually triggers penalty interest under the contract, and it is charged daily. If you can see a delay coming, tell your conveyancer early rather than on the day.
Ryan Rodriguez
Financial Services Expert
“One of the biggest mistakes buyers make is assuming pre-approval means everything is finished. A lender still needs to complete final checks before settlement, and changes to income, spending or credit commitments can create unexpected challenges.
Before making major financial decisions between approval and settlement, buyers should always understand how those changes could impact their final loan approval.”
Ryan Rodriguez – Director | bspoke Finance
How it varies by state
The mechanics are similar everywhere, the details are not. Cooling-off periods differ, some states use solicitors where others use licensed conveyancers, stamp duty rules and concessions vary, and the standard settlement period is shorter in some states than others.
This is the reason to use someone local. Conveyancers in Sydney, Melbourne and Brisbane all work to different rules.
Buying off the plan
Settlement on an off-the-plan purchase happens years after you sign, which introduces two risks a normal purchase does not have. The property can be worth less at completion than you agreed to pay, leaving you to fund the gap. And the contract will contain a sunset clause setting a date by which the development must finish. Read that clause before you sign, not after.
Getting your side ready
- Engage a conveyancer or solicitor before you sign anything, not after.
- Have finance formally approved as early as the contract allows.
- Take out building insurance from the day you sign.
- Book the final inspection days ahead, not on the morning.
- Have the funds cleared and in the right account the day before. Bank transfers do not always move as fast as people expect.
- Confirm who is collecting the keys and from where.
If you are still choosing a loan, our guide to the best home loans for first home buyers is the place to start, and brokers are listed for Melbourne among other cities.
Frequently asked questions
How long does settlement take?
The period is set in the contract, usually 30 to 90 days. The settlement itself happens electronically and takes minutes.
Do I need to be there?
No. Your conveyancer and your lender handle it between them. You collect the keys once it is confirmed.
What if settlement is late?
Penalty interest usually applies under the contract, charged daily against whichever side caused the delay. Tell your conveyancer as soon as you see a problem coming.
What if the valuation comes in low?
Your lender funds a percentage of its valuation, not the contract price, so you cover the difference in cash, renegotiate, or withdraw if your contract allows it.
Can I inspect the property before settlement?
Yes, and you should. The final inspection is your last chance to raise a problem while you still have room to act.
When does the loan start?
On settlement day. Your first repayment usually falls due a month later, depending on the lender.