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If you are buying or selling in Melbourne, the settlement date is one of the few levers that can make your life easier or much harder. Get it right and you glide from one home to the next with time to breathe. Get it wrong and you can be juggling removals, finance expiry and a nervous vendor or purchaser. So, is a longer settlement better? The short answer is that it depends on your goals, your finance and the market. The longer answer is below, with plain English tips for Victorian contracts and a few traps to avoid.
What Does Settlement Actually Mean in Victoria?
Settlement is the day the balance of the price is paid, the title is transferred and the buyer takes possession. In Victoria, the seller sets the settlement date in the contract and the period is usually 30 to 90 days. Outgoings like council rates are adjusted so the seller pays up to and including settlement day, and the buyer from the day after.
You are entitled to a pre settlement inspection in the week before settlement to make sure the property's condition matches the day it was sold.
What Counts as a "Longer" Settlement?
In Melbourne, anything beyond the common 30 or 60 days starts to feel long. Ninety days is still standard in many contracts, and it is not unusual to see 120 days where parties need extra time to sell, vacate tenants, or coordinate a move across school terms. The key is aligning the date with the realities of finance, your existing home sale and day to day logistics.
Benefits of Longer Settlement for Buyers
More Time to Line Up Finance
Conditional pre approvals are real but not forever. Many lenders and guides say pre approvals typically last around 60 to 90 days before they need refreshing. That is enough time for a 60 day settlement, but you will want a plan if you go to 90 days or beyond. Renewals are common, yet they still require updated documents and can be knocked about by valuation changes.
Breathing Room to Sell Your Current Home
If you need sale proceeds to fund the purchase, a longer settlement helps you avoid bridging finance, which Consumer Affairs Victoria notes can be more expensive. Negotiating dates so your sale settles before your purchase can save interest and nerves.
Extra Due Diligence
A longer window gives your conveyancer time to comb through the Section 32 vendor statement, owners corporation papers and searches without rushing, and for you to arrange building or specialist inspections where relevant.
Cash Flow Timing
In Victoria, duty is usually paid at settlement and, under SRO guidance, payment is required within 30 days of settlement in the electronic system era. A later settlement date means the big tax bill is later too, which can help plan savings and cash buffers.
Family and Life Logistics
More time to book reputable movers, line up tradies for quotes and organise school enrolments can be worth its weight in sanity.
Drawbacks of Longer Settlement for Buyers
Pre approval Can Expire
If your lender's 60 to 90 day pre approval lapses, you will need to renew, and the bank will reassess your situation. If interest rates, lending policies or your income shift, the outcome could change. That is not a fun email to receive two weeks before settlement.
Valuation Risk if the Market Dips
The longer the gap between contract and settlement, the more chance that a fresh valuation comes in lower than the price. This is a known risk in off the plan sales with long lead times, where independent research has flagged a meaningful share of valuations landing under contract price at settlement. A shortfall can force buyers to tip in extra cash.
Overlapping Costs
If your lease runs on or your sale settles much earlier, you might double up on rent, storage or bridging interest until you get the keys. Consumer Affairs Victoria suggests negotiating settlement dates first to avoid bridging if you can.
Benefits of Longer Settlement for Sellers
Time to Move Well
If you need to find your next home, complete minor works, or let tenants vacate in an orderly way, a longer date is a pressure valve. Remember that rates and other outgoings are adjusted so you carry them to settlement, then the buyer takes over.
A Bargaining Chip
In a competitive campaign, offering a buyer their preferred longer date can be the difference between two similar offers.
Drawbacks of Longer Settlement for Sellers
Holding Costs
Insurance, interest and rates continue until settlement. If the buyer's bank or your paperwork stumbles, the delay can sting.
Market Movement
A hot market might keep rising after you sign. If you have locked a price and agreed to a long settlement, you will not share in that upswing.
More Time for Things to Go Wrong
The longer the road, the more chances for the buyer's finance, valuation or job situation to change. Contracts commonly provide for interest if settlement is late, and even that interest can affect the duty calculation, yet nobody really wants to rely on penalties to get a deal done. Better to set realistic dates and keep communication tight.
Off the Plan and Long Settlements: Special Considerations
Off the plan contracts often have long, variable timeframes because construction is still underway. Sunset clauses set an outer date by which a developer must complete. Victoria tightened the rules in 2019, so a vendor cannot rescind an off the plan contract under a sunset clause without the purchaser's written consent or a Supreme Court order. That is a significant consumer protection given how long these contracts can run.
The longer the horizon, the greater the valuation risk at settlement if the market cools, which can translate to larger cash contributions if the bank reduces its lend based on a lower valuation. It pays to speak with your broker early and model worst case numbers.
How to Choose the Right Settlement Length in Melbourne
Start with Your Finance Clock
Check your lender's or broker's view on how long your pre approval is likely to hold. If your pre approval is 90 days, a 60 day settlement is comfortable, 90 days is tight but manageable with a planned renewal, and 120 days needs a specific strategy.
Map Your Sale and Purchase Together
If you are selling and buying, try to settle your sale first. That can remove the need for bridging finance and reduce stress. If bridging is unavoidable, build in a rate buffer and keep the bridging term as short as possible.
Know Your Non negotiables
School calendars, lease end dates and work rosters can make an extra fortnight priceless. Decide what you need before you start offering settlement dates in a contract.
Use Conditions Wisely in Private Sales
Victoria allows conditional offers in private treaty. Subject to finance, subject to sale, and building or pest inspection clauses can protect you while you steer toward the preferred settlement date. Put clear dates on those conditions so everyone knows the timeline.
Remember the Section 32 and Final Inspection
A longer settlement is not a reason to skim the paperwork. Ask your conveyancer to review the Section 32 vendor statement carefully, and make the most of your pre settlement inspection to ensure everything is as agreed.
Plan for Duty
Duty is usually paid at settlement and is required within 30 days. Your conveyancer or bank will typically handle it through Duties Online, but it is your money and your deadline. Keep funds ready.
Practical Negotiation Strategies
Trade Time for Price If you need a longer settlement, be ready to offer a slightly sharper price. For sellers, consider preferring a buyer who accepts your longer date over a marginally higher price with a tight settlement.
Be Specific in Writing In private sales, write your timelines directly into the contract. For finance conditions, add a date for approval and name your lender to avoid ambiguity.
Use Milestones Ask your conveyancer to bake in dates for finance approval, valuation and receipt of any outstanding certificates. It keeps everyone honest and surfaces problems early.
Check the Trust and Deposit Deposits are commonly paid to the agent's trust account on signing, where they sit until settlement or as otherwise directed. Confirm how and when the deposit is held and released.
90 Day Victorian Settlement Timeline
Week 1 You sign the contract and pay the deposit into the agent's trust account. Your conveyancer orders searches and reviews the Section 32. You apply for formal loan approval.
Weeks 2 to 3 Your lender orders the valuation and finalises underwriting. If you included a finance clause, this is the period to satisfy it, or to trigger the clause if needed.
Weeks 4 to 6 Lock in your movers, start utility transfers, and confirm settlement figures with your conveyancer. Keep an eye on your pre approval expiry date in case the bank needs updated payslips.
Week 12 Do your pre settlement inspection. On settlement day, funds change hands, duty is paid through Duties Online and you collect the keys. Rates and outgoings flip to you from the day after.
Is a Longer Settlement Better? The Verdict
If you are a buyer with a home to sell or a family calendar to juggle, a longer settlement can be a gift. It reduces reliance on bridging finance, gives you time to sort life admin and pushes a large duty bill further out. If you are a seller who needs time to relocate or get works finished, a longer date is equally handy.
The catch is risk exposure. The longer the gap, the more time there is for valuations, lending settings and life to change. Pre approvals do not last forever, and off the plan buyers are particularly exposed to price swings by the time settlement arrives. In balanced conditions, many Melburnians find 60 to 90 days hits the sweet spot. Shorter can be fine if your ducks are neatly in a row. Longer can be smart with a plan and the right clauses.
Quick Settlement Period Decision Guide
Choose 30 to 45 days if your finance is final, you are renting and can move quickly, or the property is vacant and both sides want momentum.
Choose 60 to 90 days if you are selling and buying, want time to organise trades and movers, or need to roll through a school term.
Consider 120 days only with clear reasons, a finance renewal plan and a conveyancer watching dates like a hawk.
Conclusion
A longer settlement is not automatically better, it is just another tool to shape a comfortable and low risk move. Match the timeline to your finance, your sale and your life, put the right conditions in your contract, and keep an experienced conveyancer in your corner.
Need help choosing the right settlement date, or a fast, free review of your Section 32? Speak with the local team at Pearson Chambers Conveyancing. We help Melbourne buyers and sellers strike the right balance every day.
Phone: 03 9969 2405
Email: contact@pearsonchambers.com.au