Property settlement is a legal process conducted by the legal and financial representatives of the buyer and seller. It’s when ownership passes from the seller to the buyer, and the buyer pays the balance of the sale price.

The seller sets the settlement date in the contract of sale. Generally, property settlement periods are 30 to 90 days, but they can be longer or shorter.

On settlement day, the buyer’s settlement agent – a solicitor or conveyancer – meets with their lender and the seller’s representatives to exchange documents. They organise for the balance of the purchase price to be paid to the seller, and lodge documents to transfer ownership to the buyer.

The buyer’s lender will lodge a new mortgage against the title, and provide the funds to purchase the property.

The seller’s representative takes care of all documentation and financials. At settlement, any surplus funds will be transferred into their nominated bank account.

If you’re doing an online settlement, buyers and sellers don’t need to attend – you just wait for confirmation from your representative that settlement has occurred.

Sometimes there are delays to settlement, which can have huge financial implications and cause significant stress.

Settlement problems for buyers include:

• Delayed financial approval from your lender;
• A shortfall of funds – such as an unexpected settlement adjustment or an unexpected bank expense;
• Difficulty selling another property;
• A late final inspection, which doesn’t give enough time to rectify an issue; and
• Documents not being provided on time.

There can also be delays to settlement from the seller’s side. These include:

• Not enough funds for settlement, as the value of the remaining mortgage is greater than the property’s sale price;
• Late requests to change the split of settlement proceeds;
• Delayed release of the mortgage; and
• Documents not being provided on time.

Here are some things you can do to ensure a smooth and successful settlement day:

• Engage a solicitor or conveyancer to act as your agent in the settlement process.
• Provide all documents on time, and ensure the sales contract has the correct settlement date.
• Buyers: you need to ensure you have all the funds required to complete the sale, including stamp duty, lenders mortgage insurance and other fees and charges. You should also organise building and contents insurance starting from the purchase date. And you should complete a final inspection of the property before settlement, allowing enough time for any issues to be resolved.

Being organised and proactive from the start can help ensure settlement happens on time, without any hiccups – or unnecessary stress.