The relief and then that buzz of excitement hearing those words: Congratulations on the settlement of your new home.
Settlement day can be both exciting and stressful. But once the title is transferred and the mortgage lodged, it’s all worth it.
If you’re planning a property purchase and are new to how settlement works, here’s a rundown.
What is settlement day?
Settlement day is when ownership of a property is legally transferred from one party to another. It’s facilitated by your legal and financial representatives, and those of the seller.
The actual date is stipulated in the sales contract.
Settlement periods are generally 7 to 8 weeks from when the sales contract is signed by both parties. However, settlement can be longer or shorter if mutually agreed upon.
What happens on settlement day?
On settlement day your solicitor or conveyancer meets with your lender and the seller’s representatives to exchange paperwork, or now with digital titles and PEXA it can all be done vitrually.
Typically, the buyer and the seller do not need to be present.
Your lender and conveyancer will arrange the following with the seller’s representatives:
- The balance of the purchase price, along with any government fees and duties, is settled. All outgoings such as rates, water charges and strata fees are adjusted between the seller and the buyer (you pay for these from the day after settlement).
- All necessary legal documents are completed and lodged with the respective agencies.
- The certificate of title is transferred to your name and the property is legally transferred to you.
Once settlement is completed, the keys are handed over by the real estate agent (usually on the same day, however it could be up to 24 hours later) and the property is all yours!
How to prepare for settlement?
1) Be organised with the paperwork.
For settlement to run smoothly, it’s important you provide all the necessary paperwork in a timely manner.
For the finance side of things, we’ll walk you through the documentation required for your loan application.
You’ll also need to work with your conveyancer to complete and submit all the necessary documentation to transfer the property title to your name.
Prior to settlement, your conveyancer or solicitor will likely get you to review the settlement statement, which outlines exactly what you will be paying on settlement day.
2) Complete a pre-settlement inspection
You’re entitled to inspect the property in the lead up to settlement to ensure it’s in the same condition as when the sales contract was signed. The last thing you want are hidden surprises when you open the front door.
3) Organise insurance
Make sure you check the date when you need to have your building insurance sorted. It may be from when you sign the sales contract, or by settlement. Rules vary by state and territory.
Ready to get started?
As your mortgage broker, we’ll organise pre-approval on your home loan and get your loan application over the line, so that everything runs smoothly come settlement day.
Get in touch today and let’s chat about your exciting new property purchase.