How long is settlement and what should I expect?

How long is settlement and what should I expect?

January 10, 2017 | by DiJones

When you are buying or selling a home, there’s a period of time stipulated in the contract that determines when the property officially changes hands. Effectively, this is when the buyer gets given the keys. This is known as the settlement date.

The length of time between signing the contract and settling can vary depending on what suits the vendor’s and the buyer’s circumstances, but in New South Wales it’s usually 42 days. It’s not uncommon, however, for settlement dates to be 30, 60 or 90 days long and it isn’t unheard of for settlement dates to be many months after a contract has been signed.

Situations that can affect settlement date include holidays – some may want to settle before or after the end of the calendar year, or the financial year – and the accommodation status of the involved parties. For instance, if a buyer has a settlement coming up soon for their own home that has sold, they may want a shorter settlement for the home they’re buying so they can avoid renting between homes.

The most important thing to remember is that communication is critical – everyone should know the ideal length of settlement and be willing to negotiate to come to a satisfactory conclusion. This should be determined when an offer is made, as it will need to be altered in the contract if changes need to be made.

How sellers should prepare for settlement

Preparing for settlement day is all about ensuring the home is in the right condition for the hand over and you have moved all of your possessions. You should also consider who you need to notify of an address change, from banking institutions and children’s schools to workplaces and friends.

  • Clean the home (including any last minute mowing, weeding and maintenance if necessary)

  • Disconnect utilities

  • Redirect your mail

  • Let Council know of a change of ownership

  • Collect all house keys together

  • Check all furniture and belongings are out of the home

  • Speak to your agent

How buyers should prepare for settlement

Most of the responsibilities for the buyer revolve around paperwork and ensuring your loan is lined up. You should be in close contact with your lender to make sure everything goes smoothly on the day.

  • Speak to your solicitor/conveyancer and your lender/broker

  • Have the funds to purchase prepared

  • Undertake an optional pre-settlement inspection

  • Prepare to update your mailing address and connect utilities

  • Line up your removalists

  • Speak to insurance companies to make sure you’re covered from day one

DiJones Real Estate, together with their directors, officers, employees and agents have used their best endeavours to ensure the information passed on in this document is accurate. However, you must make your own enquiries in relation to the information contained in this document and seek advice from your financial advisor, broker or accountant to ascertain its application to your circumstances.
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