Buying or selling property often involves one headline number: the agreed sale price. It appears in the contract, guides the buyer’s finance application and shapes the seller’s expectations about the proceeds they may receive.
However, the sale price is rarely the exact amount transferred between the parties on settlement day.
Deposits, council rates, water charges, strata levies, rent and other transaction costs may all affect the final calculation. This sometimes surprises buyers who thought their deposit covered more of the purchase than it did, or sellers who expected the sale price to arrive in their bank account without deductions.
Understanding how the final figure is calculated makes it easier to review the settlement statement, prepare the required funds and raise questions before settlement day. A Settlement Agent Ocean Reef may help coordinate these calculations, but buyers and sellers still benefit from understanding the basic principles behind them.
What Is the Final Settlement Figure?
The final settlement figure is the amount required to complete the financial side of the property transfer.
For a buyer, it generally represents the remaining amount that must be made available after taking the deposit, loan funds, adjustments and applicable costs into account.
For a seller, it represents the net amount left after deductions such as the mortgage payout, selling costs, settlement expenses and relevant adjustments.
The exact figures depend on the contract, property, settlement date and circumstances of the transaction. Two properties with the same sale price may therefore produce very different settlement statements.
The Sale Price and Settlement Balance Are Different
The sale price is the amount the buyer and seller agreed to in the contract. It is the starting point for the calculation rather than the final amount payable on settlement day.
Suppose a home sells for $800,000 and the buyer has already paid a $40,000 deposit. The remaining contract balance would begin at $760,000.
Further calculations may then be applied. These could include:
- Council rate adjustments
- Water service charges
- Strata levies
- Rent received in advance
- Registration expenses
- Electronic settlement costs
- Professional fees
- Lender-related charges
- Credits or reimbursements required by the contract
Some items increase the amount a buyer must provide, while others reduce it. The same adjustment may appear differently on the seller’s statement because it is being viewed from the opposite side of the transaction.
How the Deposit Affects the Amount Due
A property deposit is normally paid before settlement and credited towards the purchase price. It should not be treated as an additional payment on top of the agreed price.
For example, a buyer who agrees to purchase a property for $800,000 and pays a $40,000 deposit generally has a remaining contract balance of $760,000 before other adjustments and costs are considered.
The settlement statement should identify the deposit and confirm that it has been included correctly.
It is also important to confirm the amount actually paid. If the contract required a particular deposit but the parties later agreed to a variation, the settlement records should reflect the amount that was genuinely received.
The deposit may be held in a trust account by a real estate agency, settlement representative or another authorised party until it is released according to the contract and settlement arrangements.
Why Council Rates Are Adjusted
Council rates are commonly charged for a defined billing period rather than calculated separately for every day of ownership.
If the seller has already paid rates covering a period beyond the settlement date, the buyer may need to reimburse the seller for the portion applying after settlement. This is usually reflected as an adjustment in the seller’s favour.
If rates remain unpaid, the calculation may work differently. Funds may need to be allowed for or directed towards the outstanding account, depending on the contract and the information available before settlement.
This does not mean the buyer is paying the seller’s share of the rates. The purpose of the adjustment is generally to allocate the cost between the parties according to their respective periods of ownership.
Water Charges May Also Affect the Calculation
Water accounts may contain several types of charges, including service charges and usage-based amounts.
Service charges covering a defined period may be apportioned between the buyer and seller. Usage charges may require different treatment depending on the property, available meter information and contractual arrangements.
A final settlement statement may not be completed until current account information has been obtained. This means an early draft may change when updated figures become available.
Buyers should therefore avoid assuming that the first figure they receive is necessarily the final amount required.
Strata Levies for Units and Apartments
Properties held under a strata scheme may have regular levies for administration, maintenance and shared expenses.
When a seller has already paid a levy covering a period after settlement, the buyer may reimburse the relevant portion through the settlement adjustment.
Special levies may require closer attention. These are often raised for major repairs, building works or other significant expenses. Responsibility may depend on when the levy was raised, when payment is due and what the contract says.
Buyers comparing apartments may benefit from looking beyond the purchase price and reviewing the broader financial obligations attached to strata ownership. Understanding the difference between property law and conveyancing may also help clarify which professional is appropriate when unusual contractual, title or strata issues arise.
Rent and Tenancy Adjustments
An investment property may be sold while a tenant remains in occupation.
If the seller has received rent covering a period after settlement, part of that rent may need to be credited to the buyer. The buyer becomes entitled to the income connected with the period after ownership changes.
The statement may also need to account for rent arrears, prepaid amounts or other tenancy-related items. The lease, contract and management records all influence how these amounts are treated.
Tenant bonds are generally handled separately under the applicable tenancy arrangements, but the parties should still confirm what steps are required when management of the property changes.
Costs Outside the Advertised Property Price
Property buyers often focus heavily on the sale price and deposit. However, several other expenses may need to be budgeted for.
These may include:
- Transfer duty
- Registration charges
- Title or property searches
- Electronic settlement platform fees
- Settlement agent or conveyancing fees
- Bank or lender charges
- Building and pest inspections
- Loan application or valuation expenses
- Insurance required before settlement
Not every expense appears in the same document. Some may be included in the settlement statement, while others may be charged separately by a lender, government authority or service provider.
This is particularly important for people preparing to buy a first home in Perth. A deposit alone does not necessarily cover all the upfront and settlement-related costs connected with buying a property.
How the Buyer’s Final Amount Is Calculated
A simplified buyer calculation may start with the contract price and then subtract the deposit already paid.
Adjustments and transaction costs are then added or deducted as applicable. Loan funds are also taken into account to determine whether the buyer must contribute additional money.
A buyer may face a shortfall where the lender provides less than expected. This may happen because the approved loan amount does not cover all costs or because certain fees are deducted from the funds released by the bank.
For this reason, buyers should confirm the required contribution before settlement rather than relying only on their original loan estimate.
The money may also need to be provided through a specific method or by a set deadline. Transferring funds too late could affect whether settlement proceeds as scheduled.
How the Seller’s Net Proceeds Are Calculated
The seller’s calculation begins with the sale price but may involve several deductions before the remaining proceeds are released.
Common deductions may include:
- The amount required to discharge the existing mortgage
- Real estate agency fees
- Marketing expenses
- Settlement or conveyancing fees
- Outstanding rates or charges
- Adjustments in the buyer’s favour
- Other amounts authorised under the contract
The deposit may already be held by the real estate agency or another party. It therefore needs to be accounted for correctly rather than treated as money that is still due from the buyer.
A seller who owes a large amount on the mortgage may receive significantly less than the difference between the sale price and agency commission. Obtaining an approximate loan payout figure early may help set more realistic expectations.
Why the Figure May Change Before Settlement
Receiving a draft statement does not always mean every amount is final.
The figures may change because:
Updated Account Information Becomes Available
Council, water or strata information may be updated after the first statement is prepared.
The Settlement Date Changes
Many adjustments are calculated according to the number of days each party owns the property. Moving the settlement date may alter those calculations.
The Lender Changes Its Figures
A seller’s mortgage payout or a buyer’s available loan funds may change before completion.
A Contractual Issue Is Resolved
An agreed credit, repair allowance or other adjustment may be added after the parties resolve an outstanding matter.
Additional Charges Apply
A delayed settlement may create extra costs in some circumstances. Whether these apply depends on the contract and the reason for the delay.
Changes should be explained clearly so that both parties understand why the latest calculation differs from an earlier version.
A Simple Illustrative Example
Consider a fictional buyer purchasing a property for $800,000.
The calculation might begin as follows:
- Contract price: $800,000
- Deposit already paid: $40,000
- Remaining contract balance: $760,000
- Council rate adjustment: added or credited as applicable
- Water adjustment: added or credited as applicable
- Registration and electronic settlement costs: added
- Loan funds: deducted from the amount the buyer must personally provide
- Final buyer contribution: remaining amount required
This example is deliberately simplified. It does not represent a quote, standard fee structure or complete settlement statement.
The actual statement may contain more entries, particularly where the property is tenanted, held under strata title, purchased through a trust or company, or connected with another simultaneous transaction.
How a Settlement Agent Helps Check the Figures
A settlement agent coordinates information from several parties and records. This may include the contract, deposit details, council and water information, strata records, lenders and the other party’s representative.
The work commonly involves checking the financial information, preparing adjustments, arranging the required documents and confirming that funds are available for settlement.
A buyer or seller researching Conveyancing in Ocean Reef may find it useful to ask how adjustments are calculated, which charges are provisional and when the final amount is expected.
The value of this process is not simply producing a total. It is also ensuring that the entries contributing to that total are consistent with the available documents and agreed settlement arrangements.
Questions to Ask About Your Settlement Statement
A settlement statement may look technical, but it is reasonable to ask for an explanation of any unfamiliar entry.
Useful questions include:
- Has the full deposit been credited?
- Which council and water periods are being adjusted?
- Are any figures still provisional?
- Does the statement include strata levies?
- Have prepaid rent or rental arrears been considered?
- Are professional fees separated from third-party charges?
- Has the lender confirmed the available funds?
- How much money must be provided before settlement?
- When and how should the funds be transferred?
- Why has the figure changed since the previous statement?
Questions should be raised as early as possible. Waiting until settlement day may leave limited time to correct errors, transfer additional funds or obtain missing information.
Final Thoughts
The sale price is the foundation of a property transaction, but it is not the complete financial picture.
Deposits, rates, water charges, strata levies, rent, lender requirements and other expenses may all affect the final settlement amount. Buyers and sellers may also receive very different figures because each party has separate credits, deductions and financial obligations.
Reviewing the settlement statement carefully helps prevent avoidable surprises. It also gives the parties time to understand provisional figures, arrange any required funds and question entries that do not match their expectations.
A Settlement Agent Ocean Reef may coordinate the calculation and settlement process, but informed buyers and sellers are better placed to recognise what each figure represents and prepare confidently for settlement day.
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