Buying

What happens on settlement day

After celebrating success at auction or the negotiation of a private sale, attention very quickly turns to…settlement day.

Get your settlement agent

Before settlement day occurs, it’s important that you have a settlement agent. This is usually a solicitor or conveyancer who handles the process for you. Just make sure you double check the sales contract is signed and dated with the correct settlement date as agreed to by both the seller and yourself.

Final inspection

Once these are in order, you’ll want to arrange a final inspection of the property. This is largely so you can ensure that everything is working and in place as per the sales contract. This may include fixtures and fittings such as dishwashers and curtains.

Settlement day

On this day your solicitor will meet with your lender, typically a bank, and the seller’s representative in order to sign and hand over documents and cheques. These documents are then sent to the titles office where you will be registered as the new owner. During this process, your lender will register the mortgage against the title. This will stay in place until it’s paid off. The lender will also provide the funds to purchase the property or payout an existing loan.

Final transactions

The buyer and seller will either pay adjustments or receive reimbursements. These may include taxes or council and water rates, which may have been prepaid or accrued by the vendor. The solicitor will ensure any existing mortgage is paid off and any caveats are removed. They will then make sure all clauses on the sales contract are fulfilled and the transfer of land and mortgage is registered with the title office in your state.

Post- settlement

Once this is complete the solicitor will contact you to let you know settlement has gone through successfully. Once settlement is complete, the agent will release the keys to the buyer. The process can take a few hours after settlement has occurred, so it’s advisable to ring ahead and make sure keys are ready to be released before going in.

A common mistake made on settlement day is not allowing for the fact that the process can take time. It’s not uncommon for small mistakes such as missing signatures to occur and delay the process by several hours. As such it’s important to treat the process as a lengthy one in order to avoid nasty possibilities, such as having removalists paid by the hour, sitting around in the front yard, waiting for the process to be completed and the keys to arrive.

 

About the author:  Michael Cooney is a director at Hodges Real Estate in Beaumaris, Melbourne,  specialising in real estate for almost three decades, of which has seen him accumulate over a billion dollars of residential sales