Managing the settlement
You’ve found a property.
The vendor has accepted your offer and you’ve paid a deposit, plus you’ve both signed the sale contracts. But you don’t get the keys until after settlement.
Settlement is when you pay outstanding amounts to the vendor and the property title officially changes, making you the owner.
The time between exchanging contracts and settlement day – the settlement period – varies by state. In NSW, it’s usually six weeks. In Queensland, 30 days is the norm and in Victoria it’s 30 to 90 days. The length can be varied but buyer and seller must both agree.
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During the settlement period, you’ll finalise your finance. The lender will complete an independent valuation of the property and confirm the amount you can borrow.
You’ll also have a chance to inspect the property again to ensure it’s in the same condition as when you agreed to the sale.
Your solicitor or conveyancer will prepare the documentation needed on settlement day well in advance so it can be checked and you can sign in all the appropriate places. This step includes finalising council and water rates as well as any strata fees due up to settlement day. The vendor covers payments up to that time but you’ll take over from there.
THE BIG DAY
On settlement day, your solicitor or conveyancer meets with the vendor’s settlement agent and a representative from your lender to hand over the paperwork and payment cheques. You don’t usually have to attend the meeting yourself.
Your representative will let you know shortly after settlement has completed so you can collect the keys. They will also send you a statement showing how funds have been distributed.
But things can go wrong.
A document or a signature may be missing, for instance. If so, everyone works together to try to resolve the problem that day but sometimes settlement may need to be postponed.
If you’re planning to move in straight away, be prepared for such a hold up. Leave a few hours after settlement before getting the removalists in and have a plan for alternative accommodation that night.
Quick tip: You don’t take possession of the property until the paperwork and payment cheques have changed hands on settlement day. Hire a professional solicitor or conveyancer to handle the legal aspects and guide you through the process.
TO FIND OUT HOW RAMS CAN HELP EASE YOU THROUGH THE PROCESS, GET IN TOUCH WITH YOUR LOCAL RAMS HOME LOAN EXPERT OR DROP IN FOR YOUR FREE FIRST HOME BUYERS’ GUIDE.
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Disclaimer: Information in this material is general and does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. You should also obtain independent professional advice relevant to your financial circumstances.
