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Mastering the Settlement Process – What Every New Homeowner Should Know

There’s nothing quite like the excitement of receiving that email confirmation: Settlement of your property purchase is complete. Settlement day can bring a mix of emotions, from anticipation to stress, but once all the formalities are taken care of, it’s truly worth it. If you’re new to the settlement process and preparing for a property purchase, here’s a comprehensive guide to help you navigate the journey.

What is Settlement Day?

Settlement day is the official transfer of property ownership from one party to another, facilitated by legal and financial representatives of both the buyer and the seller. The specific date is outlined in the sales contract. Generally, settlement periods span 30 to 90 days from the signing of the sales contract, but the duration 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 necessary paperwork. Typically, the buyer and the seller do not need to be present. The following tasks are handled by your lender and conveyancer in coordination with the seller’s representatives:

  1. Settlement of the balance purchase price, including government fees and duties.
  2. Adjustment of all outgoings, such as rates, water charges, and strata fees, between the buyer and the seller. The buyer assumes responsibility for these expenses from the day following settlement.
  3. Completion and submission of all required legal documents to the relevant agencies.
  4. Transfer of the certificate of title to your name, officially transferring ownership of the property to you. Once settlement is finalised, the real estate agent hands over the keys, marking the completion of the process and making the property officially yours.

How to Prepare for Settlement:

  1. Organise Your Paperwork: To ensure a smooth settlement process, provide all necessary paperwork promptly. We will guide you through the documentation required for your loan application. Work closely with your conveyancer to complete and submit all required documents for transferring the property title to your name. Before settlement, review the settlement statement provided by your conveyancer or solicitor, which outlines the exact payments due on settlement day.
  2. Conduct a Pre-Settlement Inspection: You have the right to inspect the property prior to settlement to verify that it remains in the same condition as when the sales contract was signed. This step helps you avoid any surprises or hidden issues upon taking possession.
  3. Arrange Insurance: Ensure you are aware of the insurance requirements and the deadline for obtaining building insurance. The timing may vary depending on your state or territory’s regulations, either from the sales contract signing or by the settlement day.

Ready to Begin?

As your mortgage broker, we will assist you in obtaining pre-approval for your home loan and ensure a smooth loan application process, leading up to settlement day. Contact us today, and let’s discuss your exciting new property purchase.

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