Simultaneous settlement explained

• Before listing your property, it can help to get clear on your budget, your likely sale price and what funds you may need upfront to buy your next home.
• Speak with your lender about your borrowing power and how your current loan may affect your next purchase.

• Once your property is on the market, you may also be inspecting homes you’d like to buy. At this stage, timing becomes important.
• If you find a buyer for your current home and a property you want to purchase, your conveyancer or solicitor can help you understand how to align the settlement dates.

When you’re selling and buying close together, your lender may look at your income, expenses, existing debts, current home loan and how your sale proceeds may be used.

This can help you understand:

• what you may be able to borrow.
• what repayments could look like.
• whether you may need savings available before settlement.
• whether your current loan needs to be discharged.
• whether another option, such as bridging finance, may suit your situation.

You may also want to ask about conditional approval or pre-approval, before you start making offers.

• When you accept an offer on your current home, the contract of sale will include a settlement date. This date often becomes the anchor for your next purchase.
• If you’re aiming for same day settlement, you’ll generally need to negotiate your purchase settlement so it lines up with your sale settlement.
• Your conveyancer or solicitor can help review the contract conditions and explain what happens if either settlement is delayed.

• When your offer is accepted, your lender will usually need to complete further checks before giving unconditional approval. This may include a valuation of the property you’re buying.
• It’s important to understand when your finance approval is expected, when your deposit is due and whether your sale proceeds will be available in time.
• If you’re aiming to buy first before selling, you may explore options such bridging finance, which is described as short-term finance to help cover the gap between buying and selling.

Before settlement day, your lender and conveyancer or solicitor work through the financial and legal steps.

This may include:

• preparing to discharge your existing home loan.
• confirming funds needed to complete your purchase.
• arranging loan documents.
• checking settlement figures.
• coordinating with the other parties.
• preparing documents for electronic settlement.

On settlement day, your current property sale and next property purchase are completed.

In a typical simultaneous settlement, the sale proceeds from your current home may be used to pay out your existing loan, with the remaining funds going towards your next purchase. Your new home loan may then begin from the settlement date. Once settlement is confirmed, the agent can usually release the keys.