Exchanging contracts and settlement

With a contract of sale agreed upon and finance in place, it's time to exchange and settle. Learn what steps and parties are involved, plus fees to be aware of.

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Prior to exchange

Before exchanging contracts, several steps generally need to be undertaken, including:

completing all relevant property inspections and checks
reviewing and discussing the contract of sale with your solicitor or conveyancer
confirming financial arrangements.

Exchanging contracts

Exchanging contracts legally completes the property sale process. It means the seller has accepted the buyer's offer on the home and both have signed the contract of sale.

At the time of the exchange you will be required to pay the deposit for the home you are buying.

Cooling-off period

Private treaty sales in NSW have a 5 business day cooling-off period after contracts are exchanged.

The cooling-off period starts as soon as you exchange contracts and ends at 5pm on the 5th business day after exchange.

During the cooling-off period, buyers can withdraw from the sale as long as you give written notice. Usually there are financial penalties if you do this and it's worked out as a percentage of the sale price.

There is no cooling-off period for homes bought at auction. The contract of sale must be finalised after the auction is completed. It is recommended you consult a solicitor or conveyancer before you attend an auction.

Settlement

Changes to the land title system

From 11 October 2021, certificates of title ceased to be issued in NSW. Property ownership details continue to be recorded on the NSW Torrens Title Register.

Existing certificates of title are no longer valid legal documents. You do not need to destroy a certificate if you already have one.

All land transactions will be lodged online using the Electronic Lodgment Network Operators. You can conduct a title search at NSW Land Registry Services Online.

Learn more at the Office of the Registrar General.

Settlement is the process of paying the remaining sale price and becoming the legal owner of a home. At settlement, your lender will disburse funds for your home loan and you'll receive the keys to your home.

Generally, settlement takes place around 6 weeks after contracts are exchanged. Your conveyancer or solicitor can check and negotiate the settlement period with the seller.

You'll need to have money to cover settlement, including:

legal costs
conveyancing fees
transfer duty, also known as stamp duty
unpaid lending charges such as Mortgage Lenders' Insurance (LMI) or loan establishment fees, if applicable.

Some sale contracts will allow buyers to carry out a final inspection of a home on the day of settlement. This inspection is to make sure the home is in the same condition as when contracts were exchanged.

After settlement and a final inspection is complete, you can move into your new home.

Learn more about sale contracts and settlement when buying a home at NSW Fair Trading.

Update your documents

Buying or selling a home is a significant life event and it's important to review and update your Will to make sure it reflects your current circumstances and wishes.

Learn about Wills