Bought a property and buzzing to get your keys? Just a few more steps before you can pop your first cork in your new home.
What is Settlement?
Settlement is when ownership passes from the seller to you, and is the legal process facilitated by your conveyancing solicitor and financial representative. Settlement will oversee you paying the balance of the sale price and is usually 30 to 90 days following signing your contract. Following settlement, you will be able to collect your keys and begin to enjoy your new home.
What happens on settlement day?
At an agreed upon time and place, your conveyancer will meet with your lender and the seller’s representatives to exchange documents. As electronic conveyancing becomes the norm, this is increasingly being done online in a streamlined and easy process that saves the hassle of physically attending settlement.
At settlement, the balance of the purchase price will be paid to the seller. Your conveyancer will check that any existing mortgage on the title to the vendor is discharged, any caveats are removed, ensure all clauses on the sale contract are fulfilled and that the transfer of land and mortgage is registered with the title office in your state or territory. The lender will register a mortgage against the title of your property and provide the funds to purchase the property.
It is not usual for a purchaser or vendor to attend settlement. Once all parties are satisfied at settlement the agent will be informed to release the keys to your possession.
If settlement does not occur on the agreed upon day, the purchaser is liable to pay penalty interest to the balance due to the Vendor. This interest is approximately 16% daily. However do not fear, with the rise of online conveyancing, the ease of rescheduling and ensuring everything is organised prior to settlement reduces the risk of incurring this penalty.
How to prepare for settlement day?
There are many steps that will need to occur before you are able to call the property your own:
– Ensure the sales contract is signed and dated with the correct settlement date
– Ensure all the finances to complete the sale, including stamp duty, lenders mortgage insurance, adjustments and other fees, are ready and available
– Ensure you have organised building and contents insurance effective from the purchase date. This generally does not apply to units or flats covered by owners corporation insurance
– Ensure you utilise the opportunity to complete a final inspection of the property – This important step can be done within seven days prior to the date of settlement and is vital to confirm the property is in the same condition as at the time you signed the Contract of Sale. If you are not satisfied with the property at final inspection, ensure that you contact your conveyancer immediately to sort matters. Once you take possession of the property it can be very difficult to make a claim against a vendor for any deviances from what you expected. Be careful to check appliances are in working order, all chattels are in the same condition as when you first saw the property, and that the locks, keys and garage door controls are supplied and working.
– It is your responsibility to make arrangements for the connection of the telephone, electricity and gas. However, your conveyancer will notify the local council and the relevant water authority of the change of ownership.
– The keys to your property are likely to be kept with the Estate Agent, and you should organise how you will receive the keys following the confirmation that settlement has occurred.
– You may also wish to organise removalists prior to settlement to ensure a quick move into your new home. However, be cautious of prematurely organising removalists, as due to other parties being involved, an unforeseen circumstance in settlement may see it being delayed.
What happens after settlement?
By this stage I hope the champagne is on ice. Your lender will debit the amount they’ve paid at settlement from your loan account, including for stamp duty and land transfer duty. The title will not be transferred until this has been paid.
Once this is complete, you will be able to collect the keys from the agent and take possession of the property. Hoorah! Finally! *Cork pops*
Law&Co’s Titlexchange is fast becoming the market leader in conveyancing across Australia. With competitive, fixed fees across a number of standard packages and simple bolt-on services to suit your individual conveyancing needs. Transparent, simple and painless conveyancing is the order of the day so that you can get to settlement in the quickest way possible. Would like to find out more about how we can help you with your property transfer? Arrange a call with one of our lawyers today.