Settlement
The final stage of a property transaction where ownership is officially transferred, the balance of the purchase price is paid, and the buyer receives the keys. Typically 30-90 days after contract exchange.
Plain-English definition. Settlement is the final stage of a property transaction: the buyer pays the balance of the purchase price, the seller transfers ownership and hands over the keys, and the title is registered in the buyer's name.
How it works in Australia. Most Australian settlements now occur electronically through PEXA (Property Exchange Australia), where the buyer's lender, seller's lender, both conveyancers and the state titles office settle simultaneously online. Settlement periods are typically 30 days (NSW), 30–60 days (VIC), 30 days standard or "as agreed" (QLD), and 30–45 days (WA, SA). At settlement, adjustments are calculated for council rates, water rates and body corporate fees so that each party pays only for the period they own. Failure to settle on the agreed date triggers default interest (typically 12–15% p.a.) and a notice to complete; ongoing failure can rescind the contract and forfeit the deposit.
Concrete example. Contract exchanged 1 March, $850,000 price, $85,000 deposit paid, settlement 12 April. On 12 April: buyer's lender disburses $765,000 into the PEXA workspace. Council rate adjustment: vendor has prepaid $2,400, so buyer reimburses for 263 days unused = $1,729. Final cheque to vendor: $767,129 plus the $85,000 deposit released from trust. Title transfers to buyer immediately on registration.
Common confusion. Buyers assume "settlement" means moving in. Many do — but vendors sometimes negotiate a few days' rent-back. Always do a final inspection within 24 hours of settlement to confirm the property is in the same condition as at exchange and that fixtures haven't been removed.