You've signed the contract. The deposit has been paid. Settlement is six weeks away, which feels like both a long time and not nearly long enough. So what actually happens between now and the day the keys come across?
The short version is: a lot. Most buyers and sellers see almost none of it, which is why the period feels like a quiet stretch when it is, in fact, the busiest part of the transaction for your lawyer. This is a walk-through of what is happening behind the scenes, in roughly the order it happens.
The standard timeline
Settlement periods in Victoria are negotiable, but the most common are 30, 60, or 90 days from the day of sale.
The settlement date is set in the particulars of sale at the front of the Contract of Sale. Everything described below has to be done before that date arrives.
If you want to understand the whole process from signing the offer to getting the keys, our conveyancing glossary walks through the key terms.
Opening the file
In the first few days after the contract is signed, your lawyer opens the matter and does a handful of important things.
Verifying your identity. Under the Australian Registrars' National Electronic Conveyancing Council (ARNECC) Model Participation Rules, lawyers must verify the identity of every client before lodging documents electronically. We've explained the reasoning in our post on VOI. If you haven't done this already, your lawyer will arrange it early.
Reviewing the executed contract. Even if a contract was reviewed before signing, your lawyer will read it again carefully, looking at special conditions, settlement date, deposit terms, and any subject-to clauses. Anything that needs to be actioned (for example a finance approval notice or a building report) gets diarised against its deadline.
Stamp duty assessment. For purchasers, the Digital Duties Form is prepared in the State Revenue Office portal. This is what calculates land transfer duty, applies any concessions, and unlocks the settlement at PEXA. If you're a first home buyer, see our stamp duty guide for the current thresholds and concessions.
Updated searches and certificates
This is when your lawyer chases the third parties whose information is needed to settle.
Title search. A fresh search of the title confirms the registered proprietor, any mortgages, caveats, easements, and covenants. The Section 32 should have disclosed these, but a current title check makes sure nothing has changed since the contract was signed.
Rates and outgoings certificates. Your lawyer orders certificates (or updates of the certificates in the Section 32) from the local council, the water authority, the State Revenue Office (for land tax), and, where the property is on a plan of subdivision with common property, the owners corporation. These certificates show exactly what is owing as at the settlement date. The figures feed into the Statement of Adjustments, which apportions rates between vendor and purchaser as at settlement day.
Discharge of mortgage. On the vendor's side, the seller's lawyer instructs the existing mortgagee to prepare to discharge the mortgage at settlement and to confirm the payout figure.
New mortgage and loan documents. On the purchaser's side, if there is a loan, the buyer's bank issues mortgage documents, schedules a valuation if it hasn't been done, and certifies the loan as ready in PEXA. This is the single most common cause of delayed settlements, so your lawyer will be in regular contact with the lender's settlement team.
PEXA workspace and special conditions
Once the basic work is done, the focus shifts to setting up the actual settlement and clearing any conditions in the contract.
PEXA workspace. Your lawyer creates an electronic settlement workspace in PEXA (Property Exchange Australia), invites the other side's lawyer and both banks, and starts loading documents. PEXA is the platform almost every Victorian residential settlement runs through. We've written a separate guide to how PEXA works.
Insurance. Buyers often ask when they need to insure the property. Under the LIV/REIV Contract, the property remains at the vendor's risk until settlement, but most lawyers still recommend buyers take out building insurance from the day of sale, particularly for an established home. If you're buying off the plan, talk to your lawyer.
Section 34 protection. If a dwelling on the land is destroyed or becomes unfit for occupation before settlement, section 34 of the Sale of Land Act 1962 (Vic) gives the purchaser a right to rescind the contract by written notice within fourteen days of becoming aware of the damage. This is a useful backstop, but the practical answer is still: have insurance in place.
The final week
In the seven days before settlement, things ramp up.
Final inspection. Under the LIV/REIV Contract, the purchaser is entitled to inspect the property once in the seven days before settlement, at a reasonable time arranged with the vendor or their agent. This is to check that the property is in the same condition as when you signed, that all inclusions listed in the contract are still there, and that no new damage has occurred. It is not a chance to raise issues that existed when you signed the contract. Previously, a purchaser could withhold up to $5,000 for minor damage, but these issues must now be sorted through insurance or negotiation. Inspect carefully.
Statement of Account. Your lawyer sends you a Statement of Account showing exactly how much you need to have ready and available to complete settlement. This will include the balance of the purchase price (less the deposit already paid), land transfer duty, registration fees, adjustments, and legal fees, less your loan amount. This "shortfall" needs to be available in cleared funds, at least one day before settlement.
Settlement booking. The settlement time is locked in inside PEXA. Settlement can occur at any time within the broader window now permitted by the electronic lodgement network. In practice, most residential settlements happen between 11 am and 4 pm.
Signing documents. You will sign the transfer of land and any loan documents electronically. Your lawyer does the rest.
Settlement day
This is the day the money moves, the title transfers, and the keys are released. The actual mechanics of settlement day, and what to expect on the morning of, are covered in our separate post on settlement day in Victoria.
What could delay settlement
The most common causes of late settlement are:
The buyer's bank not being ready in PEXA on time
Funds to complete not arriving in trust in time
A discharge of mortgage not being booked by the seller's bank
An unresolved issue at the final inspection
A defect in the title or a caveat lodged late in the piece
A lawyer who's actively managing the file should pick most of these up well before settlement day. If a delay is unavoidable, the Contract of Sale has rules about when penalty interest starts running and who is liable to pay it.
Where Nextstep fits in
The reason the contract-to-settlement period feels quiet to most buyers is that a well-run file is one you barely have to think about. The work is happening; you just shouldn't be the one chasing it.
If you'd like a lawyer who'll keep you posted as each step is ticked off without overwhelming you with email, book a quote or, if you haven't signed yet, send us a contract for a free same-day review.
This article provides general information about Victorian property law. It's not a substitute for legal advice on your specific situation. If you'd like to discuss your circumstances, get in touch.
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