Time needed by some lenders to assess home loan applications is now getting beyond a joke, especially when improvements in technology should be leading to faster assessment outcomes.

Besides catering for inept lender processes, there are other reason settlement periods are at least 30 days from when the contract of sale gets signed by all parties.

For standard property transactions, conveyancers will need enough time to complete required searches, such as those relating to rates, water, land tax, building records and so on.

These need to be conducted and reviewed before the contract of sale becomes unconditional, so, making the settlement period too short could potentially lead to missed settlement due to incomplete due diligence.

For buyers purchasing with bank finance, a key consideration is allowing enough time for the bank to formally approve, issue and review the borrower completed loan documents.

As alluded to at the start, this can take some time, once you advise the bank that a contract has been signed and you’re proceeding to a settlement date, assuming you were already pre-approved, lenders require anything from 2 to 14 days to give you unconditional finance approval, and for some lender, even this is not enough.

Once your loan is formally approved, you then need a minimum of 14 days to receive and sign all the loan documents. These are issued by the bank’s solicitors, and unless your lender is up with the times and uses e-documents, physical documents are sent out to you for signing, then sent back to the bank for review, all by traditional post.

Keep in mind, if you accidentally miss a signature or forget to complete the surplus funds section, this can delay everything for a few days as the lender will resend the documents to you, so be diligent when completing your loan documents.

Complex transactions take more time

If you’re using a guarantor, or you’re purchasing through a family trust or anything of that nature, the process takes even longer because the banks have to do more to make sure everything is in order.

Any level of complexity can add days or even weeks to a settlement time frame.

Longer settlements are also common when buying ‘off the plan’, as the scheme or plan has to be registered with the titles office before settlement can occur.

Choose a date that works for you

Settlement day, or the day just before it, is your last chance to inspect your property before taking ownership.

Don’t agree to a settlement date when you’re going to be unavailable all day, or when you’re going to be away on holiday, for example. You need to be around on the day to check that everything at your new property is in order.

Negotiate if you can

Buyers and sellers regularly negotiate property settlement dates that work for them both.

Sometimes they do this via the selling agent, or if they have already appointed a legal representative, that representative might conduct the negotiations with the other party.

The system is different with auctions. As the successful bidder, you are agreeing to settle on the date indicated in the contract.

When you review this document prior to bidding, if you know the date won’t work for you, have a chat to the selling agent and try to sound out whether or not the vendor would consider negotiating an alternative date.

Whether it’s a sale by private treaty or a sale by auction, once a contract has been signed, the settlement date is fixed. Either party may approach the other about amending the date, but there is no obligation for the other party to agree to a change.

That’s why it’s important you make sure the date works for you, right from the beginning

Settling on a settlement date involves careful consideration and negotiation, but it’s well worth the time and effort to achieve a date that works for both buyer and seller. Your settlement experience will be the smoother for it!

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This article does not constitute advice; readers should seek independent and personalised counsel from an appropriate trusted adviser that specialises in property, a tax accountant and property or interior design specialist.