What happens on settlement day

Settlement is the day the property legally becomes yours. Nothing is signed in a room any more; it happens online, usually in the early afternoon, and the keys are released by the agent once the money has moved. Here is how the day unfolds and what can go wrong.

When settlement happens

The date is in the contract. Common periods are 42 days after exchange in NSW, 30 to 90 days in Victoria and 30 days in Queensland, counted from the contract date. Settlement must be on a business day, and most take place between 11am and 3pm so that banks can process the funds the same day.

The week before

• your lender confirms the loan is ready and tells us the amount it will provide
• we send you a settlement statement showing the price, the deposit already paid, adjustments for rates, water and levies, duty, our fee and disbursements, and the balance you must provide
• you transfer the balance to our trust account or your lender's account in cleared funds a day or two before, so there is no delay waiting on a bank transfer
• you do the pre-settlement inspection with the agent: the property should be in the same condition as at exchange, the inclusions present and, if sold with vacant possession, empty

On the day

Settlement takes place on PEXA, the electronic settlement platform used across NSW, Victoria and Queensland. We, the seller's representative and both lenders sign into a shared workspace. At the scheduled time the funds move in a single transaction: the seller's mortgage is discharged, duty is paid to the revenue office, the agent's commission and the seller's balance are paid, our fees and disbursements are settled, and the transfer and your lender's mortgage are lodged with the land registry. The whole exchange takes a few minutes. We then tell the agent that settlement is complete, and the agent releases the keys. There is nothing you need to attend.

What can delay settlement

• the lender is not ready: documents unsigned, a valuation outstanding, or funds not released. The most common cause
• the buyer's balance is late or short
• a problem at the final inspection: damage, rubbish left behind, an inclusion removed
• a discharge of the seller's mortgage not booked in time
• an error in the adjustments or a dispute about them
• a PEXA or bank outage, rare but it happens

If settlement is delayed, the party at fault may owe penalty interest at the rate in the contract and, after a notice to complete, the other side may be able to terminate. We chase every party in the days before to stop it getting that far.

After settlement

The agent hands over the keys; change the locks. Rates, water and levies are now yours from the settlement date, and the authorities are notified of the change in ownership. The title moves into your name at the land registry within a few days. Keep the settlement statement with your records.