Looking online and going to inspection can definitely be enjoyable, but can you find a buyer who can honestly say that they dislike the long-drawn-out and chaotic back-and-forths.
Property settlement is the culmination of home-buying process. It is when you officially become the owner of the home you have always wanted. And what’s more, the tough work is over for you.
Here are some helpful tips to make the property settlement process simpler and easier for you:
Know about property settlement
The first thing you need to know that is property settlement is a legal process that hands over the ownership of a property from the owner to another. It is the day of paying the rest of the sale price, and it typically performed by the buyer’s legal and financial representatives and those of the vendors.
The vendor assigns the settlement date in the contract of sale, with most stated between 28 and 42 days after the sale is agreed upon.
Schedule the last inspection
The property must be transferred by the seller to the new owner in the same state as when it was sold. You can see if the seller is on track to fulfil this duty by inspecting the home at one point during the settlement period.
In NSW a buyer’s right to a pre-settlement inspection is usually set down for the afternoon before or the morning of your settlement date.
During the inspection, buyers should make sure all fixtures and fittings in the agreement are present.
Take out building and contents insurance
It is normal for your bank to advise you to organise building and contents insurance in effect beginning on the date the vendor signs the agreement. Doing this should protect the interest of both you and the seller.
For the duration of the property settlement, both the seller’s and your representatives will have to figure out the portion of rates and other fees that each of you have to pay.
The vendor must pay for fees up to and including the settlement date, and you must pay for fees from the day following the settlement date.
The correct amount you have to pay will be stipulated in a document called a settlement adjustment statement.
This document will also specify the amount of land transfer duty, or stamp duty, you must pay on the sale. Depending on the state where the home is located, you have between 28 days and three months following settlement to pay this duty. However, remember that the title cannot be given to you until you have paid for it.
Understand the things that happen on settlement day
Your bank and settlement agent (which could be your lawyer or solicitor) are in charge on settlement day – in fact, you don’t even need to be there.
Your representatives and the vendor’s representatives will meet to sign and exchange the final documents of sale, with each of the party responsible for a specific list of tasks unless using PEXA which means that settlement will happen electronically.
Your bank will sign on a mortgage against the title of your new home and give the funds to buy your new home, and your lawyer or conveyancer will have to make sure that all rights of third parties have been stripped off, that the current mortgage on the seller’s title has been executed, that all provisions on the sales agreement have been met, and that the home and mortgage transfer is filed with the right titles office.
After all these tasks are completed, your bank will deduct from your loan account the amount they paid at settlement and then you must pay the stamp duty.
Finally, you’re all good to get the keys and move into your new home.