In part 1 of our guide to selling your home, we explained everything you need to know about the Contract of Sale, Section 32 certificates and how the cooling-off period works. If you haven’t read it yet, make sure to start here to get the full picture.
This final piece about the sales process covers the settlement period and what can go wrong while you are waiting for completion.
What is Settlement?
Settlement is an official process where ownership of your old property passes from you (the vendor) to the buyer. It takes place on a specific date, usually agreed by you and the buyer, and involves you receiving the balance of the purchase price before the buyer becomes the new registered owner of the property.
The settlement period is the amount of time between the exchange of contracts and the settlement day (when ownership is transferred from you to your buyer).
This settlement process can take anywhere between 30–120 days (except if you’re in New South Wales, where it typically is 42 days), involves several steps and doesn’t always go smoothly.
It is important to note that the cooling-off period already forms part of the settlement period — in other words, having a cooling-off period does not extend the time until you settle.
Why Does Settlement Take So Long?
The simple answer is because completing a property sale requires many legal, financial and administrative tasks to be done by you and the buyer before you receive the cash for your old house and handover the keys to your new owner. For this reason, settlement typically takes between four to six weeks — something you don’t have to experience if you sell with Sellable.
What Can Go Wrong During Settlement?
Given the ins and outs of what’s involved in selling a house, it’s no wonder one in five property settlements in Australia are delayed by a median of seven days. However, there are several things you and your buyer can do to minimise the common problems that stall settlement.
- Sign all relevant financial documents promptly and accurately. This will help your buyer’s lender and your bank be able to approve their home loan and discharge your mortgage on the property — both of which are required to transfer the property to the new owner.
- Ensure your house is in the condition your buyer agreed to in the Contract of Sale. Any issue that hasn’t been resolved by the time of the final inspection may hold up settlement if the buyer is unhappy with the situation.
- Complete all important property administration documents, such as the Transfer of Land, accurately and on time to avoid hold ups. Errors or tardiness can slow down settlement, so it’s important you and your buyer are committed to being organised.
- Keep an open dialogue about situations, such as simultaneous settlement, that may hold things up. If the sale of your buyer’s house depends on their ability to purchase yours, and they’re struggling to shift it, then you need to work together to find a solution that helps manage everyone’s frustrations and costs.
How Can Sellable Take Away the Settlement Stress and Pay You Fast?
With Sellable, there’s no nerve racking wait or headaches liaising with legal and financial people to finalise your house sale. We will give you a guaranteed price for your current property, based on a fair and independent valuation. There’s no need to negotiate with a buyer about settlement dates, something that can become particularly onerous in the case of simultaneous settlement (insert link to simultaneous settlement feature). Once you accept our offer you can freely choose your own settlement date — just tell us when you would like to move out and we’ll pay you on the same day (which can be as early as 7 days). And if your old home sells for more than the guaranteed price, you’ll receive 75 percent of any additional upside — a handy bonus that could be used to help you buy your new home.