Unconditional and Settlement
Congratulations! You’ve successfully navigated the auction, tender, or negotiation process. Once your purchase becomes unconditional, the property is officially yours on settlement day.
Pay the deposit Almost all real estate agencies will require a 10% cash deposit immediately upon going unconditional. In some cases, you may get a pre-auction waiver for a smaller deposit, or organise a bridging loan with your bank if your deposit is less than 10%. Speak to your bank beforehand to ensure your online limits are set for large transfers.
Meet any conditions of sale If your offer was conditional on finance, legal review, or a building report, organise these immediately. Your lawyer will guide you through this process.
Inform your lawyer From this point, your lawyer will take the lead on the settlement process. Provide your lawyer’s details to your agent, who will share the purchase agreement and work alongside the vendor’s lawyer to prepare the property for transfer.
Organise insurance Arrange insurance coverage as soon as you leave the building. A certificate of cover should start on settlement day. This protects you and is typically required by your bank for lending.
Take a deep breath You’ve done it! Step outside, go for a walk, and let the accomplishment sink in.
Settlement Funds
Purchasing a property involves a series of financial transactions around settlement day:
On-sale deposit – 10% Your 10% deposit is paid to the vendor via the agency trust account. If the sale is conditional and falls through, this money is returned. Once unconditional, the deposit becomes part of the final payment.
Lending amount – typically 80% On settlement day, your bank transfers the agreed loan amount to your lawyer’s trust account, which is then sent to the vendor’s lawyer.
Your remaining contribution You provide the remaining balance from your personal account to your lawyer, combined with the bank funds, to complete the purchase.
Example Buying a $1,500,000 property at auction with a 20% deposit works like this:
Bank lends 80% ($1.2M)
You provide 20% ($300,000)
On the fall of the hammer, you pay a 10% deposit ($150,000)
On settlement day, the bank transfers $1.2M, and you pay the remaining $150,000.
Total paid to the vendor: $1,500,000
Pre-Settlement Inspection
You are entitled to one inspection before settlement. Schedule this at least a week in advance. Bring a friend for an extra pair of eyes. The inspection serves three purposes:
Ensure the property hasn’t changed since purchase (no new damage).
Verify included chattels are present and functional.
Confirm the vendor has met contractual obligations.
If issues are found, contact your lawyer. Often, settlement proceeds with funds withheld until problems are resolved.
Settlement Day
On settlement day, ownership officially transfers to you. Your lawyer manages the process, and keys are released either by the agency or your lawyer. While straightforward, key collection may involve a bit of running around.
If you cannot settle Failing to settle is serious. Contact your lawyer immediately. The vendor may retain your deposit and claim damages, including costs of enforcing the sale, relisting, or covering lost opportunities. Once the contract is signed, walking away is not an option.
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