What is settlement in property purchases?

Settlement is the legal and financial completion point of a property transaction. It is when the buyer transfers the purchase price to the seller, the lender's mortgage is registered against the property title, and ownership officially passes from the seller to the buyer. This typically occurs several weeks after contracts are exchanged.

On settlement day, several parties are involved: the buyer and seller, their respective lawyers or conveyancers, the lender, and the settlement agent (usually a law firm). The settlement agent coordinates the movement of funds, ensures all legal documents are executed correctly, and confirms that property searches are clear. The buyer's lender releases mortgage funds, the buyer pays their deposit and any additional funds owing, and the seller receives payment minus any costs or adjustments.

Settlement can proceed at a law office, title office, or remotely via electronic settlement. Once funds clear and the Register of Titles is updated, the buyer becomes the legal owner. Until settlement occurs, the buyer has no ownership rights despite holding a signed contract. This is why finance approval and final inspections happen before settlement date. For buyers working with a mortgage broker, settlement coordination is typically handled by the broker's settlement team or the buyer's conveyancer to ensure all lender requirements are met on time.