What happens on settlement day?

After weeks of searching, negotiating, and planning, settlement day is the moment it all becomes real. It’s the final step in the legal process of buying a home, where ownership officially transfers from the seller to you. While your lawyer handles most of the technical details, understanding the process will help you enjoy a smooth and stress-free move into your new home.

Here’s a simple breakdown of what happens in the lead-up to settlement day and on the day itself.

The final check: your pre-settlement inspection

In the 24 to 48 hours before settlement day, you have the right to conduct a pre-settlement inspection of the property. This is your final opportunity to check that the home is in the same condition as when you signed the Sale and Purchase Agreement.

Your pre-settlement inspection checklist:

• Check for new damage: Walk through every room and make sure there is no new damage to the walls, floors, or fixtures that has occurred since you last viewed it.
• Test the chattels: The seller is required to ensure that all chattels listed in the agreement are in “working condition”. Turn on the oven, run the dishwasher, check the heat pump, and test all other included appliances and systems.
• Ensure everything is there: Check that all agreed-upon chattels—like curtains, light fittings, and appliances—are still in the property.
• Confirm rubbish has been removed: The seller should have removed all their belongings and any rubbish from the property.

If you find any issues during this inspection, contact your lawyer immediately. They can then communicate with the seller’s lawyer to resolve the problem before the final payment is made.

The money transfer: how the payment happens

In the days before settlement, your lawyer will provide you with a final “settlement statement”. This document details the exact amount of money you need to pay. It includes the balance of the purchase price (after your deposit and mortgage funds) and any adjustments for things like council rates.

You will need to transfer this final amount into your lawyer’s trust account, usually at least 24 hours before settlement day to ensure the funds are cleared and ready to go.

On the day: the legal handover

Settlement day itself is mostly a behind-the-scenes process managed by the lawyers for you and the seller.

1. Your bank will transfer the mortgage funds to your lawyer’s trust account.
2. Your lawyer then transfers the total purchase amount to the seller’s lawyer.
3. Once the seller’s lawyer confirms they have received the full payment, they will notify your lawyer that the settlement is complete.
4. The property title is then officially transferred into your name, and the property is legally yours.

This process usually happens around lunchtime, but the exact timing can vary depending on the banks and legal firms involved.

The best part: getting the keys

As soon as the money has been transferred and the sale is confirmed, the seller’s lawyer will instruct the real estate agent to release the keys to you. Your lawyer or the agent will call you to let you know you can come and collect them. This is the moment you’ve been waiting for—you are officially a homeowner!

You’ve moved in! What’s next?

Congratulations! Once you have the keys, you can start moving in. Here are a few final admin tasks to tick off:

• Set up your mortgage payments: Your first mortgage payment is usually due about a week after settlement. Make sure you have the automatic payment set up and ready to go.
• Connect your utilities: Arrange for final readings at your old address and ensure power, gas, and internet are connected at your new home.
• Notify people of your new address: Update your address with your bank, employer, IRD, and NZ Post to set up mail forwarding.
• Consider changing the locks: For peace of mind and security, it’s always a good idea to change the locks on your new home.