What sellers can expect on settlement day

Navigating the intricacies of settlement day is crucial for a seamless property sale experience. Whether you’re a first-time seller or a seasoned property owner, understanding the settlement process can help you avoid confusion and ensure everything goes smoothly.

To help you have a smooth settlement day, we’ve put together a list of common questions about settlement day and what you can expect.

Understanding settlement day

Settlement marks the final step in the property sale process, where financial transactions and legal paperwork are completed to transfer ownership to the buyer. On this day, the buyer takes legal and physical possession of the property.

When does settlement occur?

The settlement date is specified in the contract between you and the buyer, and it varies depending on the agreement. This period, known as the “contract period,” allows time for all necessary conveyancing and legal work. Depending on negotiations and location, the settlement period can range from 28 to 120 days – though, is generally 42 days in New South Wales.

What happens on settlement day?

At settlement, the buyer is required to pay the full purchase price and in exchange, the seller is obliged to transfer their ownership in the home to the buyer. In New South Wales, this will generally occur on an online settlement platform, known as PEXA. A couple of things to note:

1. Transferring money: As the seller, please ensure you have enough funds to pay off any existing mortgage. Whilst in most cases, the sales price will exceed the seller’s home loan payout, this is not always the case. Please ensure you speak to your lender before settlement so you know approximately how much you need to repay at settlement (and if that is more than the sales price, you should ensure that you have sufficient funds to cover the shortfall).
2. Transferring titles: In exchange for paying the full purchase price, the property title is transferred to the buyer, making them the new legal owner of the property.
3. Handover keys: Once the agent has been notified that the sale has been completed, they will hand over the keys to the new owner, which means the sellers no longer have access to the property.

Seller responsibilities

As a seller, you must ensure all rates and taxes are paid up to the settlement day. The buyer assumes responsibility for these from the day after settlement. These payments, known as “adjustments,” are part of the settlement process and should be handled by your lawyer.

You must hand over the property in the same condition as at the contract date. The buyer will conduct a pre-settlement inspection to confirm this. Ensure the property is clean, tidy, and free of personal items. If any damage has occurred, it is your responsibility to repair it or compensate the buyer.

Consider leaving a welcome pack for the new owners, including appliance manuals and contact details for maintenance services, to add a personal touch.

Tips for a smooth settlement day

• Plan ahead: Avoid last-minute rushes by preparing in advance. Ensure the property is ready for the new owners by the settlement time.
• Emotional closure: If you’ve lived in the home, take time to say goodbye and focus on the new beginnings at your next address.

Celebrating settlement day

With a reliable conveyancer, the settlement process can be managed smoothly. Celebrate your successful sale with a toast or by reflecting on your achievement.

Get in touch

If you have any questions about the settlement process, please get in touch with us using one of the below buttons or alternatively, visit our Selling a Property Information Centre to get more information on our services or to simply get an instant quote. We’re here to help you every step of the way!