Purchasing a new property can seem like a marathon, and the process of getting your finances in order and doing all the required property checks, the settlement process can feel like the long-awaited finish line. It signifies the moment when you finally attain legal possession of your new property, but it’s more than just exchanging money for keys.
Settlement is a well-structured process, comprising essential activities that need to be completed before you can officially move into your new abode. This includes:
- Pre-settlement (or final) inspection: This crucial phase provides you with an opportunity to thoroughly examine the property and ensure that everything is in order. The property should ideally be in the same condition as it was when the contract of sale was signed. The contract itself should outline which fixtures and fittings are included in the sale and what the seller may remove.
- Checking and signing the transfer documents: Ensuring all necessary paperwork is in order is another essential aspect of the settlement process.
- Registering the transfer of ownership: This step requires the transfer of ownership to be formally registered with the relevant government agency.
- Making final payment to the seller: Before the keys change hands, the remaining payment to the seller must be processed.
Most people choose to enlist the services of a conveyancer or solicitor to navigate this intricate process. Let’s delve deeper into the settlement process to give you a more comprehensive understanding.
Duration of Settlement
The settlement period typically spans between 1 and 4 months, commencing from the day the contract of sale is signed and culminating on the scheduled settlement day. The exact duration is mutually agreed upon by both buyer and seller and outlined in the contract of sale.
Pre-settlement/Final Inspection
This phase is pivotal as it allows you to confirm that the property remains in the same condition as when the contract was signed. It’s also a moment to ensure that all systems and appliances are in working order. Your conveyancer or solicitor can offer expert advice during this inspection, guiding you on what to look for and how to address any issues.
Settlement Day
This marks the culmination of the process, the day when you officially gain legal possession of your new home. The date is prearranged by you and the seller, and it’s specified in the contract of sale.
Tasks on Settlement Day
Several legal and administrative tasks must be completed before the property is handed over to you. The good news is, your conveyancer or solicitor can handle these tasks on your behalf. They will ensure everything is in order, including liaising with your bank and the seller’s conveyancer or solicitor.
Shortly before final settlement, your conveyancer or solicitor will provide you with a settlement adjustment statement, which includes details like stamp duty, any concessions, and potential grants. It may also account for adjustments to cover the seller for council rates, water, and body corporate fees.
Final settlement takes place when your conveyancer or solicitor meets with the seller’s representatives to exchange necessary documents and funds, finally granting you the keys to your new property. It is then that the transfer of ownership is registered with the relevant government agency in your state or territory.
In the run-up to settlement day, do your best to alleviate any anxiety by thoroughly preparing and organising. This includes ensuring you have adequate house and contents insurance in place, with coverage beginning on or before settlement day.
For additional guidance on preparing for settlement day, don’t hesitate to consult with your conveyancer or solicitor.
Once it’s all wrapped up, your conveyancer or solicitor will furnish you with comprehensive settlement details, including a statement of adjustment to confirm the distribution of funds. Your lender will also provide information on your loan amount and repayments. With all these elements in place, you’re ready to pick up the keys, move in, and start enjoying your new home.
PropHero Guides Your Through the Settlement Process
PropHero is a one-stop shop for property investors. We manage the whole process from end-to-end, including all the nitty-gritty details during the settlement process. If you’re looking to invest in property, be sure to talk with our team beforehand to see if we can make this process easier for you. Book in time with our team here for a free, no-strings attached chat with our property coaches.