How Long Does It Take to Buy a House in NSW, From Offer to Settlement?

Your offer has been accepted.

Congrats!

So… when do you get the keys?

For a standard property purchase in NSW, settlement is commonly around six weeks after contracts exchange, although shorter and longer settlement periods can absolutely be negotiated.

But there is an important distinction here:

Your offer being accepted and contracts exchanging are not the same thing.

And the period between those two events can be anything from a few hours to a couple of weeks… sometimes longer.

So if you’re trying to work out when to give notice to your landlord, book removalists or arrange for your mother-in-law to arrive with a label maker, here’s how the timeline actually works.

Step 1: Your offer is accepted

You’ve negotiated the price and the agent tells you the vendor has accepted your offer.

Celebratory champagne?

Sure.

Booking the removalist?

Not quite yet.

In a standard private treaty sale in NSW, an accepted offer does not mean you have exchanged contracts.

Until exchange takes place, the transaction isn’t locked in. NSW Government guidance on making an offer on a property puts it plainly: a sale is binding on the seller and buyer when contracts are exchanged, and before that happens the seller may still negotiate with other buyers for a higher offer. If you are gazumped, neither the agent nor the seller is obliged to compensate you for what you have already spent.

The agent will usually send the contract to your conveyancer, and this is when things start moving fairly quickly.

Step 2: We review the contract

Before you exchange, we review the contract and title and explain the important parts to you.

This includes looking at things such as:

• the settlement period;
• the deposit;
• the cooling-off period;
• inclusions and exclusions;
• easements, covenants and restrictions on title;
• special conditions added by the vendor; and
• anything else in the contract that may materially affect your purchase.

If there are terms we think should be changed, this is also when we negotiate with the vendor’s conveyancer or solicitor.

This stage can happen very quickly.

Sometimes we receive a contract in the morning, and the client is ready to exchange that afternoon (or even within a few hours!).

Other purchases require more time.

The important thing isn’t setting a record for NSW’s fastest contract exchange.

It’s making sure you understand what you’re buying before you become legally committed to it.

Step 3: You do your pre-purchase due diligence

This happens either before exchange or, depending on the circumstances of the purchase, during a cooling-off period.

For a house, that will commonly include organising your building and pest inspection and progressing your finance approval.

If you’re buying a strata property, you should also undertake your own appropriate due diligence in relation to the strata scheme.

The timing here depends on the transaction.

In a competitive market, a purchaser might exchange quickly with the benefit of a cooling-off period and complete outstanding enquiries during that time.

In other circumstances, you may want everything completed before you exchange.

Your conveyancer can explain the risks and help you decide what is appropriate for your particular purchase.

Step 4: Contracts exchange

This is the big one.

Once contracts exchange, you are legally bound to the purchase, subject to any applicable cooling-off rights and the terms of your contract.

The deposit is paid and the settlement period begins.

For many NSW residential transactions, settlement is 42 days (6 weeks) from exchange. That number isn’t arbitrary: the 2022 edition of the standard Contract for the Sale and Purchase of Land published by the Law Society of NSW prints the date for completion as the 42nd day after the contract date, unless the parties write in something else.

But 42 days isn’t compulsory.

Settlement could be 21 days.

It could be 28 days.

It could be 60 days.

It could be three months.

We’ve even settled a property within 24 hours of exchange!

That’s certainly not the norm (and requires everyone involved to be very organised), but the point is that settlement periods can be negotiated to suit the particular transaction.

It depends on what the parties negotiate and agree to in the contract.

Which brings us to an important point…

Don’t agree to a settlement period before checking whether it actually works

We see this surprisingly often.

The agent asks:

“Would 28 days work for settlement?”

The buyer, understandably keen to secure the property, says:

“Yep!”

Then the contract arrives with us.

The buyer is borrowing 90%.

Their lender hasn’t completed the valuation.

Their formal loan approval hasn’t been issued.

Their broker has never been asked whether a 28-day settlement is achievable.

And suddenly 28 days feels considerably shorter than it did on Saturday morning.

If an agent asks you to agree to a particular settlement period, speak to your conveyancer and broker before committing to it.

A short settlement is perfectly manageable when everyone is ready for it.

It’s considerably less fun when they’re not.

What happens during the six weeks before settlement?

This is the period where buyers sometimes wonder whether anything is happening.

A lot is happening.

It’s just not particularly Instagrammable.

During the settlement period, your conveyancer is working through the legal and practical requirements needed to transfer the property into your name.

That includes undertaking the necessary searches and enquiries, liaising with your lender and the vendor’s representative, checking settlement adjustments, preparing for the electronic settlement and monitoring the contractual deadlines.

Your lender is also preparing the loan for settlement.

The vendor’s lender may be arranging the discharge of their mortgage.

Council, water and other figures need to be obtained and adjusted.

Everyone needs to be ready at the same time.

Think of it as a six-week group project where nobody works for the same organisation.

Your conveyancer is trying to make sure everyone submits their part on time.

What is the cooling-off period in NSW?

For most residential property purchases by private treaty in NSW, the purchaser has a five-business-day cooling-off period, unless that right has been waived or an exception applies.

The cooling-off period runs from exchange. It doesn’t get added to the end of your settlement period.

If you rescind the contract during the cooling-off period, there is generally a financial penalty equal to 0.25% of the purchase price.

There are also circumstances where there is no cooling-off period… most notably when you purchase at auction.

Your conveyancer will explain whether a cooling-off period applies to your transaction and when it expires.

What if you’re buying at auction?

Auction purchases work differently.

If you’re the successful bidder, you’re entering into a binding contract then and there.

There is no cooling-off period.

Which means all the work you’d ordinarily have an opportunity to do before becoming unconditionally bound needs to happen before auction day.

That means sending us the contract for review in advance, organising your building and pest inspection, completing any other due diligence you require, speaking to your lender or broker about finance and negotiating any contract amendments before you bid.

Can we receive an auction contract late on Friday afternoon for an auction on Saturday?

Yes.

Does this happen?

Also yes.

Would we prefer Wednesday?

Very much so.

If you’re even thinking about bidding at an auction, send us the contract.

You don’t need to wait until you’ve decided you’re definitely going to bid.

Can you settle earlier than six weeks?

Absolutely.

Short settlements of 21 or 28 days are quite common.

But everyone needs to be able to meet that timeframe… particularly your lender.

If you’re obtaining finance, speak to your broker or lender before agreeing to a short settlement.

Remember that the vendor may also have a mortgage that needs to be discharged, and their bank needs time to prepare as well.

Wanting to move in sooner unfortunately does not make banks move faster.

We’ve tried.

Can you have a longer settlement?

Yes.

Longer settlements can be negotiated where they suit both parties.

A vendor may want additional time because they’re buying another property, waiting for a new home to be completed or simply need longer to move.

A purchaser might want a longer settlement because they’re selling another property or need additional time to organise their finances.

The settlement period is a commercial term of the deal.

If you need something outside the usual six weeks, raise it before contracts exchange.

What if you’re selling and buying at the same time?

Welcome to the property version of Tetris!

It’s extremely common to sell one property and use the sale proceeds to fund the purchase of another.

Ideally, the settlements are coordinated so that your sale settles first and those funds are then available for your purchase.

When everything works, it’s beautifully uneventful.

When the purchaser of your property isn’t ready, but the vendor of the property you’re buying very much is, things can become interesting.

This is why coordinating settlement dates across both transactions is important from the outset.

Tell your conveyancer and broker that the transactions are linked as early as possible so everyone can plan accordingly.

What can delay settlement?

The usual suspects include:

• your lender not being ready;
• the vendor’s lender not being ready to discharge their mortgage;
• an issue identified at the final inspection;
• outstanding contractual requirements;
• settlement figures that haven’t been agreed;
• a linked sale or purchase being delayed; or
• one of the parties simply not being ready to complete.

Most potential delays don’t suddenly materialise at 2.59 pm on settlement day.

They usually start becoming apparent beforehand.

Part of our job is keeping an eye on the transaction so we can identify problems early and work out what needs to happen next.

So how long should you allow to buy a house in NSW?

As a general guide, allow around six weeks from exchange to settlement, plus whatever time you need between having your offer accepted and exchanging contracts.

Sometimes the whole process moves incredibly quickly.

Sometimes it doesn’t.

The biggest mistake is assuming the date suggested when you make your offer is automatically achievable.

Before you commit to a settlement date, check with the people who actually need to make it happen… your conveyancer and, if you’re borrowing, your broker or lender.

At MG Conveyancing, we act for property buyers across Sydney and the Central Coast. We review your contract before you sign, explain the process in plain English, keep track of the deadlines and manage your purchase through to settlement.

And yes, we’ll tell you when you can collect the keys.

We know that’s the email you were actually waiting for.

Buying a property? Send us the contract before you sign, and we’ll let you know what your realistic timeline looks like.