Buying and selling property at the same time can be stressful, particularly when the settlement of one property needs to happen before or at the same time as the settlement of another.
This situation is commonly referred to as a simultaneous settlement.
For example, you may be selling your current home and using the settlement proceeds to purchase your next property. In this situation, the timing of both transactions can be extremely important.
A small delay in one settlement can potentially affect the other transaction.
This article explains what simultaneous settlement means, how it works in Victoria and what buyers and sellers should consider when coordinating connected property transactions.
What Is a Simultaneous Settlement?
A simultaneous settlement occurs when two or more property transactions are scheduled to settle around the same time.
A common example is:
- You sell your existing property.
- Your sale settles.
- The funds from that sale become available.
- You use those funds towards purchasing your next property.
- Your purchase settles.
Sometimes the transactions may occur on the same day, while in other situations they may be scheduled at different times on the same day or on closely related dates.
Why Do People Need a Simultaneous Settlement?
The most common reason is that the buyer needs the proceeds from selling one property to help fund the purchase of another.
For example:
You own Property A and are purchasing Property B.
You need the money from the sale of Property A to contribute towards the purchase of Property B.
This creates a connection between the two transactions.
If Property A does not settle as planned, you may not have the funds required to complete the purchase of Property B.
Is Simultaneous Settlement the Same as a Same-Day Settlement?
Not necessarily.
A simultaneous settlement can involve transactions that are scheduled on the same day, but they do not necessarily have to settle at exactly the same time.
The timing depends on the circumstances of the transactions, the parties involved and the settlement arrangements.
Your conveyancer can help coordinate the transactions and communicate with the relevant parties.
How Does a Simultaneous Settlement Work?
The exact process varies, but a typical situation may look like this:
Step 1: You Sell Your Existing Property
You enter into a Contract of Sale to sell your current property.
Step 2: You Purchase Your New Property
You enter into another Contract of Sale to purchase your new property.
Step 3: Your Conveyancer Coordinates Both Matters
Your conveyancer needs to be aware that the transactions are connected.
This allows the settlement arrangements and funding requirements to be considered together.
Step 4: Your Sale Settles
The proceeds from your sale become available.
These funds may then be used towards the purchase of your next property.
Step 5: Your Purchase Settles
The funds required for your purchase are provided and the transaction is completed.
Step 6: You Receive Possession of Your New Property
Once settlement of the purchase has been completed, you can generally obtain the keys in accordance with the contract and settlement arrangements.
What Happens If My Sale Settlement Is Delayed?
This is one of the biggest risks with connected settlements.
If your sale does not settle on time, you may not receive the funds required for your purchase.
This could potentially result in your purchase settlement also being delayed.
For example:
Sale settlement delayed → funds unavailable → purchase settlement affected
The consequences will depend on the contracts and circumstances of the transactions.
This is why it is important to tell your conveyancer as early as possible that your purchase depends on the sale of another property.
What If My Purchase Settles Before My Sale?
This can create a funding issue if you are relying on the sale proceeds to complete your purchase.
You may need to consider alternative funding arrangements.
Depending on your financial circumstances, this could involve:
- Additional finance
- Bridging finance
- Temporary funding arrangements
- Assistance from your lender
You should discuss your funding position with your lender or mortgage broker well before settlement.
Do not assume that the sale proceeds will automatically be available in time for your purchase.
Can I Use the Deposit From My Sale to Buy Another Property?
The deposit received on a sale is generally held in a trust account and is not automatically available to the seller immediately.
The timing and circumstances of any release of the deposit are governed by the relevant legal requirements.
Therefore, you should not assume that the deposit from your sale will be available to fund your purchase.
If you need sale proceeds to complete your purchase, speak with your conveyancer and lender early.
What Happens If One Transaction Is Delayed?
A delay in one transaction can have a flow-on effect.
For example:
Property A → Property B → Property C
If the settlement of Property A is delayed, this may affect the funds required for Property B, which may then affect another connected transaction.
Where several transactions are linked, communication between the parties is particularly important.
What Should I Tell My Conveyancer?
Tell your conveyancer as early as possible if:
- You are selling one property and buying another
- You need sale proceeds to fund your purchase
- Your purchase depends on another settlement
- You have multiple connected property transactions
- You have a strict moving date
- You need the transactions to settle on the same day
The earlier your conveyancer knows, the easier it is to identify potential issues and coordinate the transactions.
What Should I Tell My Lender?
Your lender should also know if your purchase depends on the sale of another property.
Your lender may need to coordinate:
- Loan approval
- Discharge of your existing mortgage
- New loan funding
- Settlement arrangements
- Timing of funds
Make sure your finance arrangements are confirmed well before settlement.
What About Moving House?
Simultaneous settlement can also create practical challenges.
You may need to coordinate:
- Removalists
- Temporary accommodation
- Storage
- Key collection
- Utility connections
- Final inspection
- Access to the new property
It is generally better not to assume that you will receive the keys at a particular time until settlement arrangements have been confirmed.
Can I Have a Final Inspection Before Settlement?
Buyers are generally entitled to conduct a final inspection in accordance with the applicable contract terms.
If your purchase and sale are happening on the same day, you should plan the timing carefully.
Your final inspection should generally take place before your purchase settlement, allowing you to identify any concerns before settlement where possible.
What Happens If the Buyer of My Property Delays Settlement?
If you are relying on your sale proceeds to fund another purchase, the buyer’s delay could have consequences for your own transaction.
Depending on the circumstances and contract terms, there may be rights and remedies available.
Your conveyancer can advise you about the options available in your particular circumstances.
Can I Make My Purchase Contract Subject to the Sale of My Existing Property?
This depends on the negotiations and the terms agreed between the parties.
A buyer may seek to include a special condition that makes the purchase conditional on the sale of another property.
However, not every seller will agree to such a condition.
If you are considering this arrangement, you should obtain advice before signing the contract.
Common Mistakes to Avoid
Assuming Both Settlements Will Happen Automatically
Connected transactions require careful coordination.
Not Telling Your Conveyancer About the Other Transaction
Your conveyancer needs to know about the connection between the transactions.
Relying on the Deposit From Your Sale
The sale deposit may not be immediately available for use.
Leaving Finance Arrangements Until the Last Minute
If your purchase depends on additional funding, arrange it early.
Booking Removalists Too Early
Settlement times can change. Confirm your settlement and key collection arrangements before committing to strict moving arrangements.
Assuming You Can Move Into the New Property Immediately
You generally need to wait until settlement has been completed and possession is available under the contract.
Frequently Asked Questions
What is a simultaneous settlement?
A simultaneous settlement occurs when two or more connected property transactions are scheduled to settle around the same time.
Can I use the money from selling my house to buy another property?
You may be able to use your sale proceeds towards your purchase, but the timing of the two settlements needs to be carefully coordinated.
Can I use my sale deposit to fund my purchase?
Not necessarily. A deposit paid by the buyer of your property is generally held in trust and may not be immediately available to you.
What happens if my sale does not settle?
If your purchase depends on your sale proceeds, a delayed sale settlement may affect your ability to complete your purchase.
Can my conveyancer coordinate both settlements?
Yes. If the transactions are connected, your conveyancer can coordinate the conveyancing aspects and communicate with the relevant parties.
Should I tell my lender about my simultaneous settlement?
Yes. Your lender should be aware of your funding arrangements and any connected sale and purchase transactions.
What happens if my purchase settles before my sale?
If you are relying on your sale proceeds, you may need alternative funding. Speak with your lender or mortgage broker as early as possible.
How Prox Conveyancing Can Help
At Prox Conveyancing, we understand that buying and selling property at the same time requires careful coordination.
If your sale proceeds are being used to fund your next purchase, we can help coordinate the conveyancing aspects of both transactions and communicate with the relevant parties.
Our goal is to help you understand the settlement process and identify potential issues before settlement day.
If you are planning to sell one property and purchase another, let us know as early as possible so your transactions can be coordinated appropriately.
About the Author
Meet Sally
Sally Kwok is a Licensed Conveyancer and the Director of Prox Conveyancing. With more than 16 years of experience in the conveyancing industry, she is committed to helping buyers and sellers navigate Victorian property transactions with confidence. Sally is passionate about providing clear communication, practical guidance and personalised service throughout every stage of the conveyancing process.
👉 Learn more about Sally on our About page.
About Prox Conveyancing
Prox Conveyancing is a Victorian conveyancing practice providing professional conveyancing services for residential property transactions across Victoria. We assist buyers, sellers, investors and families with a wide range of conveyancing matters, delivering personalised service, transparent communication and professional support from contract through to settlement.
👉 Learn more about Prox Conveyancing on our About page.
This article provides general information only and is not legal advice. Every property transaction is unique, and the information above may not apply to your particular circumstances. If you require advice about your specific situation, please contact a qualified legal professional or licensed conveyancer.