This article is for general information purposes only and reflects the state of information at the time of publication. It is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before making decisions.
Understanding Property Settlement Timelines
Some of the most common questions clients ask at the start of the process are “how long does settlement take?” and “when can we settle?”
There is no simple answer to these questions, as many factors affect the settlement timeline. Buyers and sellers are eager to settle quickly, but allowing a little extra time can help ensure that everyone’s expectations are met.
The Contract
The settlement period begins from the day the Contract of Sale is signed by both parties. The length of the settlement is indicated in one of the clauses in the contract and is mutually agreed upon by the seller and buyer. In New South Wales, the typical settlement period is 42 days.
Settlement Delays
Even with a set due date, delays may occur. Many contracts do not allow enough time between acceptance and settlement, which can result in delays.
Bank Delays
Typically, two banks are involved in a settlement:
- The seller’s bank (discharging bank) for the existing mortgage.
- The buyer’s bank (incoming mortgagee) for the new finance.
The discharging bank usually requires a minimum of ten business days to prepare, which can extend to fifteen or twenty business days for complex situations. The incoming mortgagee then prepares mortgage documents that the buyer must sign and return. Most lenders allow ten to fifteen business days, though more time may be required for complex loans.
Holidays or Absences
If buyers or sellers are unavailable to sign documents, settlement can be delayed. Most paperwork can be prepared in advance, but your conveyancer will need notice to arrange this. Notify your conveyancer if you’re going away to ensure smooth processing.
Related Settlements
If your buyer is also selling another property, the two settlements may need to coincide. Delays in the related settlement can affect your own timeline.
Ideal Timing for Settlement
Before entering into a contract, discuss your financial situation with your bank or broker. Usually, 28 days from the contract date is sufficient for everyone, including the banks, to be ready to settle.
Be Proactive During Settlement
- Sign and return paperwork to your conveyancer and bank promptly.
- Respond to emails and calls quickly.
- Inform your conveyancer immediately of any changes in your circumstances or plans.
