What settlement length do you recommend?

Hi Guys,

We are in the process of selling our PPOR and then buying elsewhere. The house is on the market and an offer has been made and a price agreed to. No contracts have been signed yet and wont be until mid-week.

Given that we would like to complete a simultaneous settlement with our new property, what length settlement should I put on the sale contract? Please note, there does not seem to be a house on the market where we want to buy that is suitable as yet. Therefore, we may need a few weeks to find a property.

I'm thinking we should put a 12 week settlement on the sale to give us plenty of time to find a purchase but are there risks involved in this???

Many, many thanks for any insight.

I would personally even try for "120 days or earlier by mutual agreement" to give you plenty of time to find something. If you did find something earlier than expected you can bring the date forward if the purchase agrees.
The "standard" time to settle in NSW is 42 days. However, you could make that 56 days without raising any concern for most purchasers.

Any longer than that and you are starting to diminish your potential pool of purchasers who want to get into their new property. Having said that, some purchasers would be happy with a long settlement - say in the case of where they are selling a property to buy yours. So often it will work out OK.

If you want to be a real b@$t@rd of a vendor ;) you can sign a contract for 56 days and then take as long as you like anyway. You will find that there are almost no penalties for a vendor delaying settlement (but there are for purchasers).
Does the buyer that's made the offer know you want an extended settlement? You may see their offer disappear otherwise.

They made the offer without actually requesting to see the contract. The agent tells me that settlement is not an issue for the purchaser but I can't be assured the agent has actually had such a conversation with the guy.