What happens at settlement.
Settlement is the final milestone in the home-buying journey — the moment the property officially becomes yours. While a lot happens behind the scenes between your conveyancer, lender, the seller’s representatives and the settlement platform, understanding the process helps avoid stress and ensures everything runs smoothly.
At Lumo, we guide clients through every step leading into settlement so there are no surprises on the day.
What settlement actually is
Settlement is the legal and financial process where:
Your lender provides the loan funds
The seller receives payment for the property
Title is transferred into your name
Rates, water and other adjustments are finalised
Your mortgage is registered
You get access to the keys
Most settlements today occur electronically through PEXA, which speeds up the process and reduces paperwork errors.
Who’s involved in settlement
Several parties work together behind the scenes:
Your lender – prepares and releases loan funds
Your conveyancer/solicitor – manages legal documents, adjustments and communication
Seller’s conveyancer – receives funds and completes transfer
The real estate agent – releases keys once settlement is confirmed
PEXA/settlement workspace – the online platform facilitating the transfer
You typically don’t need to attend settlement personally.
What happens in the lead-up to settlement
1. Final loan approval & loan documents
Once the lender grants formal approval, loan documents are issued for you to sign.
Returning these promptly ensures settlement can be booked on time.
2. Verification of identity (VOI)
You must complete legally required ID checks so the title can transfer correctly.
3. Settlement adjustments
Your conveyancer calculates adjustments such as:
Council rates
Water charges
Body corporate fees
Rent (if buying an investment property)
These adjustments ensure each party pays only for their period of ownership.
4. Pre-settlement inspection
Usually done 1–2 days before settlement.
You check the property is in the same condition as when you agreed to buy it, and that any negotiated repairs have been completed.
Understanding your shortfall funds
Your shortfall is the amount you must personally contribute to complete the purchase.
This includes:
Your remaining deposit
Stamp duty (if not paid earlier)
Legal fees or adjustments
Any difference between the loan amount and the total funds required
Your conveyancer will give you a breakdown, so you know exactly what is needed.
How you pay your shortfall funds
These days, there are two common methods, depending on your lender and conveyancer:
1. Paying into your solicitor’s trust account
This is the traditional method.
You transfer your shortfall funds to your solicitor’s secure trust account before settlement.
Your solicitor then contributes these funds in the PEXA workspace at settlement.
This method is still widely used, especially with smaller conveyancing firms.
2. Using your new lender’s linked transaction account
Most major lenders now open a new transaction account alongside your home loan.
This account is used to:
Hold your shortfall funds
Receive any settlement surplus
Act as your main banking account after settlement (if you choose)
How it works:
Once your loan documents are returned, the bank opens a new account
You transfer your shortfall into that account
The bank automatically contributes these funds on settlement day
This is now the most common process because it is simpler, faster and fully integrated with the lender’s settlement system.
At Lumo, we let clients know which option applies as soon as formal approval is issued.
What happens on settlement day
At the scheduled time:
Your lender and conveyancer log into the PEXA workspace
Your loan funds and shortfall funds are combined
These funds are paid to the seller
The title is transferred to your name
Your mortgage is registered
Your conveyancer confirms completion
The real estate agent releases the keys
If settlement happens earlier than planned (common with electronic settlements), you may receive the call sooner than expected.
What can delay settlement?
Common causes of delays include:
Loan documents not signed or returned in time
Shortfall funds not cleared
Errors in bank or conveyancer details
Valuation issues discovered late
Incorrect or missing identification
Last-minute contract disputes
We actively monitor timelines and communicate with all parties to help avoid delays.
How to ensure a smooth settlement
You can help the process by:
Signing and returning loan documents quickly
Completing identity checks early
Ensuring shortfall funds are transferred well before the due date
Attending your pre-settlement inspection
Staying reachable on settlement day
These simple steps make a big difference in avoiding unnecessary stress.
Let’s chat.
Want help preparing for settlement or checking your shortfall requirements? At Lumo, we coordinate everything with your lender and conveyancer to keep settlement on track. Let’s chat.
This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.