Settlement is the final step in your property purchase — the moment when ownership officially transfers from the vendor to you. In Victoria, settlement typically occurs 30 to 90 days after you sign the Contract of Sale, and the process involves your legal representative, the vendor's legal representative, your bank, and the land titles office.
Here's a step-by-step timeline of what happens, who is responsible for each task, and what can go wrong.
What is settlement?
Settlement is the legal process by which the buyer pays the balance of the purchase price and the vendor transfers ownership of the property. Under Victorian law, the property does not change hands until settlement is complete. Until that moment, the vendor remains the registered proprietor on the certificate of title.
Most Victorian settlements now happen electronically through PEXA (Property Exchange Australia), rather than in a physical settlement room with lawyers exchanging cheques and documents.
Timeline: What happens after you sign the contract
Day 1–3: Cooling-off period (private sales only)
If you bought via private sale, you have a three business day cooling-off period. During this time, you can withdraw from the contract, though you'll forfeit 0.2% of the purchase price (for example, $1,600 on an $800,000 property). Auction purchases have no cooling-off period.
Week 1–2: Engage your conveyancer or solicitor
Your conveyancer or solicitor takes over the process. They will:
- Review the contract and Section 32 if they haven't already
- Order title searches and confirm no new encumbrances have been registered
- Contact the vendor's representative to confirm settlement details
- Set up the PEXA workspace for electronic settlement
Week 2–4: Finance and bank preparation
Your lender prepares the mortgage documents. You'll need to sign loan documents and the bank will register a mortgage on the title. Your conveyancer coordinates with the bank to ensure funds are available on settlement day.
Week before settlement: Adjustments and final checks
Your conveyancer prepares the settlement statement, which calculates the final amount due. This includes adjustments for:
- Council rates: Apportioned between vendor and buyer based on the settlement date
- Water rates and usage: Similarly apportioned
- Owner's Corporation fees: If applicable, levies are adjusted to the settlement date
- Land tax: If applicable, adjusted proportionally
1–2 days before: Pre-settlement inspection
You have the right to inspect the property before settlement to confirm it is in the same condition as when you signed the contract. Check that:
- All inclusions listed in the contract are present
- No damage has occurred since the contract was signed
- The property is vacant (unless otherwise agreed)
- All fixtures and fittings are intact
Settlement day
On settlement day, the following happens simultaneously through PEXA:
- Your bank transfers the loan funds
- You transfer the balance from your own funds
- The vendor's mortgage is discharged
- Stamp duty is paid to the State Revenue Office
- The Transfer of Land document is lodged with Land Use Victoria
- You become the new registered proprietor
Settlement typically occurs between 10am and 4pm on business days. Once confirmed, your agent releases the keys.
What can go wrong at settlement?
Delays are more common than you might expect. The most frequent causes include:
- Bank delays: Your lender fails to have funds ready on time. This is the single most common cause of delayed settlement.
- Outstanding rates or charges: The vendor has unpaid council rates, water bills, or OC levies that must be cleared before settlement can proceed
- Defects at pre-settlement inspection: If you discover damage or missing inclusions, your solicitor may negotiate to delay settlement until resolved
- Title issues: An undischarged mortgage or caveat on the title can delay or prevent settlement
What happens if settlement is delayed?
Under the standard Victorian contract, if settlement is delayed by either party, the other party can serve a Notice to Complete. This gives the defaulting party 14 days to settle. If they still fail to settle, the other party may terminate the contract and claim damages.
Penalty interest also applies for each day of delay, typically calculated at a rate specified in the contract (often around 10–12% per annum on the outstanding balance).
Settlement costs to budget for
- Conveyancing fees:$800–$2,500 depending on whether you use a conveyancer or solicitor
- Title registration fee:Approximately $120–$150
- PEXA fee:Around $100–$130 for the electronic settlement platform
- Land transfer duty (stamp duty):This is your largest settlement cost — see our stamp duty guide for current rates
Prepare early, settle smoothly
The best way to avoid settlement surprises is to start well before settlement day. Have your solicitor review the Section 32 and Contract of Sale thoroughly, confirm your finance is unconditional well before settlement, and keep in regular contact with your conveyancer.
If you haven't reviewed your contract yet, start with a Pre Contract Review at precontractreview.com to identify any issues that could affect your settlement timeline.