On settlement day, the buyer pays the balance of the price, the seller's mortgage is paid out, and the title is transferred to the buyer.
In NSW this is done electronically by the solicitors or conveyancers for each side.
You do not need to attend. You collect the keys once settlement is complete.
Before the day
In the days before settlement, the solicitors for each side agree the settlement figures.
These include the balance of the price and the adjustments for council and water rates. The seller pays up to the settlement date and the buyer pays from it.
The buyer's lender confirms it is ready to settle.
The seller must give the buyer a current land tax clearance certificate at least 14 days before settlement.
Transfer duty must be paid by settlement, unless it was due earlier.
The final inspection
The NSW Government suggests the buyer inspect the property on the morning of settlement.
Check that it is in the same condition as when contracts were exchanged.
Check that the inclusions listed in the contract are still there.
If something is wrong, tell your solicitor before settlement takes place.
How electronic settlement works
All NSW settlements are completed electronically.
Each side must be represented by a solicitor or conveyancer who subscribes to an electronic lodgment network. The networks named by the NSW Registrar General are PEXA and Sympli.
The representatives for each side work in an electronic workspace. On settlement:
- The buyer's funds, including the loan from the lender, are paid.
- The seller's mortgage is paid out from the price.
- Any land tax shown on the clearance certificate can be paid from the sale funds.
- The balance is paid to the seller.
- The transfer, and the buyer's mortgage, are lodged for registration with NSW Land Registry Services.
All dealings in NSW have been lodged electronically since 11 October 2021.
After settlement
Your solicitor tells you when settlement is complete.
You can then collect the keys.
The transfer is registered and the title records you as the owner.
From settlement, the council and water rates for the property are yours to pay.
Protecting your money
Property settlements are a target for fraud.
Revenue NSW warns of scams involving property payments and messages that appear to come from solicitors or conveyancers.
The NSW Registrar General advises practitioners not to send bank details for settlement funds by email.
Before you send money, call your solicitor on a number you already know and confirm the details.
Where buyers get caught
Sending funds on an emailed instruction.
Always confirm bank details by phone first. A changed bank account in an email is a warning sign.
Skipping the final inspection.
Once settlement is done, it is much harder to raise a problem that was there on the day.
Lender not ready on time.
If your lender is not ready, settlement can be delayed. The contract sets out what happens if a party does not settle on time.
Assuming the keys come with the contract.
Keys are released only once settlement is complete.
Common questions
Do I have to be present at settlement?
No. Settlement is done electronically by your solicitor. We tell you once it is complete.
What time does settlement happen?
The time is arranged between the representatives for each side. We tell you the time in advance.
What if settlement does not happen on the day?
The contract sets out what happens if a party does not settle on time. We advise you on your rights and act on them.
Have a solicitor run your purchase from contract to settlement. Call (02) 8062 6300.
This article is general information only. It is not legal advice for your situation.