What happens after settlement day?

If you’re in the process of buying a home, you might be wondering what happens once your property settles. Besides becoming the official owner of your new home, there are a few key changes that take place on and after settlement that are worth being aware of.

We’re here to run you through what happens on settlement day for the buyer and what to expect once your property has settled.

What is a settlement?

Settlement is the legal process of transferring ownership of the property from the seller to you as the buyer (or technically your lender if you’re using a home loan to fund the property purchase). 

The settlement date is listed in the contract of sale, along with any other conditions that need to be met first. If you’re working with a solicitor, conveyancer or settlement agent, they’ll work with the seller’s representative and the lenders involved to take care of the settlement process for you.

How long does settlement take?

The settlement period typically takes anywhere from 30 to 90 days, but it can be longer or shorter depending on what you negotiate with the seller.

In terms of the actual settlement process on settlement day, many settlements happen electronically and are often completed within the hour. With that said, it’s important to make sure you provide your conveyancer with all the information they need to complete the settlement so there aren’t any unexpected delays.

How to prepare for settlement

As the buyer, there are a few key elements that you’ll need to take care of in the lead-up to settlement to make sure it goes smoothly.  

While your conveyancer should help guide you through this process, here are a few things you’ll need to prepare:

• Review, sign and date the contract of sale, making sure to check the settlement date and any other conditions,
• Complete a building and pest inspection if you’ve included this as a clause within your contract of sale,
• Arrange finance with your bank or lender, making sure you have enough to cover the upfront costs of buying a property,
• Take out home and contents insurance effective from the settlement date or the date the contracts are exchanged depending on your state or territory requirements,
• Review and sign the settlement statement prepared by your solicitor or conveyancer, and
• Complete a pre-settlement inspection in the days leading up to your settlement date to make sure you’re happy with the condition of the property before you take on ownership.

What to do on settlement day

So long as you have a solicitor or conveyancer acting on your behalf, there’s not a whole lot for you to do on settlement day besides wait to hear that the settlement has been completed. With that said, it can be helpful to know what happens on the buyer’s and seller’s side so you have a better understanding of the process.

What happens on the buyer's side?

As the buyer, here’s what you can expect to happen on settlement day:

• Transfer of funds: On settlement day, your conveyancer or solicitor will transfer the funds to the seller's representative. This is often done electronically using the PEXA conveyancing platform.

• Settle stamp duty: Depending on your state or territory, you’ll need to pay stamp duty before or on settlement day. Check in with your conveyancer or solicitor to understand the specific requirements.

• Registration of title: Your conveyancer or solicitor will ensure that the transfer of ownership is registered with the relevant state or territory authority.

• Receive keys: Once settlement is complete, your representative will get in touch to let you know. Then you can collect the keys to the property from the real estate agent.

What happens on the seller’s side?

There are also a number of moving parts on the seller’s side on settlement day, including:

• Receive payment: ​​On settlement day, the seller's conveyancer or solicitor will receive the funds from your representative and confirm the successful transfer of ownership.

• Discharge mortgage: If there's an existing mortgage on the property, the seller's representative will arrange for its discharge and notify the relevant financial institution.

• Transfer property title: The seller’s representative will arrange for the property title to be transferred from the seller to you as the buyer.

• Handover keys: Once settlement is complete, the seller's real estate agent will hand over the keys to the property to you or your representative.

My property has settled, now what?

Once your property has settled, you can pick up your keys and make plans for your new home. Whether you plan on moving straight in, completing a few improvements or renting out your property as an investment, now that settlement is complete, you’re free to take control of your property.

Your lender will draw down your loan, meaning they’ll debit the loan amount they paid at settlement from your new mortgage account. You’ll need to start marking your loan repayments along with other ongoing costs that come with owning a home, like home loan fees, council rates, strata fees, utilities and insurance to name a few.

Whether you’re looking to buy a home, get property insights or calculate your borrowing power, Unloan has you covered. Explore our buy a home offering to learn more about our new home loan and how it can help to save you more. 

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This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

Unloan is a division of Commonwealth Bank of Australia.

‍Applications are subject to credit approval; satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000. 

‍Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.