Need help selling your property? Want to know what the settlement process is and how it will work for you? The method of settling your property is relatively easily understood, yet it doesn’t make it any less complicated. To ensure the property transaction process is done with all the legal measures, there are various methods to undertake.
The most reliable way to get a thorough understanding of the process is to talk to a property conveyancer or property lawyer. However, having some insight into the process before meeting with the agent and any negotiations are entered into because it will assist in easing any concerns you have.
Ensuring you have the right team behind you in the form of a professional real estate agent, solicitor or conveyancer will help you through the settlement by helping take off the load.
The process used to transfer the ownership of a home to another person as part of a sale is called a property settlement. Legal and financial representatives facilitate the settlement for buyer and seller.
The period of time the settlement usually takes is anywhere between 4-12 weeks after the contract has been signed by both parties. The settlement period will be outlined within the sale contract agreed on by the seller and buyer.
The Process for The Sale of a Property
There are ten steps that are necessary for clarity:
- To ensure all clauses are met, your contract will be inspected for accuracy.
- Ensure you are on top of your ATO clearance certificate and all other paperwork is both completed and filed before the day of settlement.
- If not already done, all boundaries and measurements are noted, and a title search will take place.
- It’s likely that the purchaser will then carry out a property valuation.
- Up to the date of settlement, all taxes and rates will have been paid.
- Pre-settlement inspection will be conducted by the purchaser to ensure the property was in the condition when the contracts were first signed.
- Payment of land transfer duty fees will take place.
- Debts that are already existing on the property will be settled.
- Next, documents that need lodging with the applicable land registration authorities will take place.
The property is taken possession of by the new owner.
Once you have this detailed overview, it eases the mind and takes a lot of the stress out of the situation. The positive aspect is that solicitors and other financial institutions have extensive knowledge and practise of what is entailed when conducting settlement transactions. This can make things a whole lot more manageable during what can be a stressful time.
Why a Conveyancer or Solicitor is Needed?
When you are settling a property, either as a seller or buyer, you want to do what is in your best interest. A legal team like a solicitor or conveyancer understands all your requirements during this process. There are many negotiations with necessary government entities and unless you feel confident to take on yourself, having professionals doing it for you is the best solution. Conveyancers and Solicitors meet with your financier about your mortgage to ensure all the documentation is signed and transfer the new owner’s name and mortgage to the title.
A conveyancer will also give you guidance on how much you will need to pay for rates, taxes, and stamp duty until the sale date. The fee that you pay for their services, usually between $700 and $1,300, is worth the expertise you get from them.
Attending the Property Settlement Signing
You are not required for the property settlement signing because it’s completed by your financial and legal representative. Any documents that require your signature would have already been done before settlement day. Essentially, the signing on the day of settlement is done on your behalf by your legal representation or conveyancer, who will meet with the buyer’s representatives to finalise the process. It should be noted that it is only then that your loan will be settled.
As the seller, there is nothing further for you to do other than wait to hear from your legal representation to inform you the transfer has gone through. Once all this has gone through, you will be notified that the house has officially been sold. Now is when you will hand the keys over, and the new owners can formally take possession of their new home.
Preparing for Settlement
The list for a seller and buyer are relatively different when preparing for settlement. There will be things for you to check off to ensure the settlement takes time on the right day and time. If communication has gone according to plan, then everything should go well and schedule. During this time, your real estate representative plays an active role in the process and will guide you through.
For a seller, most of the hard work takes place before the pre-contract signing stage. This includes:
- Title searches;
- Special conditional;
- Financial arrangments; and
All that is required of you at this point in preparation for the settlement is to ensure your agent and finance manager will complete the sale for you. You will be aware of the date in advance because the date is agreed on when contracts were signed. Given that you will be absent from the transfer of property, you must make sure all the financial document is up to scratch so your loan can be paid off.
That is all that you’re required to do, other than arranging the removal of your belongings and that you have somewhere suitable to live yourself. The keys will be handed over, and your home owned by the buyer once the property settlement occurs.
A day or two before the settlement, the buyers will want to undertake a final inspection of the property. This ensures that it still meets all the agreements noted in the contract and essentially safeguard their purchase. Additionally, it makes sure that carpets, fittings and fixtures are still as they should be too. Being prepared for this will make it a whole lot more smooth running.
From the Buyer’s Perspective
There is a lot of excitement that surrounds buying a property; however, there are many things that you will have on your to-do list before settlement day. Some of these items will be:
- Do a house inspection to ensure everything is in working order;
- Arrange building and contents insurance from settlement day; and
- Arrange for furniture removal to your new home a few days after settlement in case there are any delays;
Once settlement day is over and the documents are submitted to the necessary government entities, all that is required of you is to pick up the keys and move in.
Settlement Day Processes
At the time and day of settlement agreed on by both parties, your representatives will complete the document transfer on your behalf. This is when your loan will be balanced and registered against the property title.
Within your final tally, any expenses acquired up to, including the day of, will be included. Any further outgoings are handed to the new owners of the home, and the solicitor will make sure any taxes, water rates etc… are calculated and paid.
One all is done and the transfer documents are completed and lodged as per state and government law, the keys get handed to you, and you take legal ownership of the property.
Issues on Settlement Day
While it’s nice to think that the whole settlement process will go smoothly, and that’s what everyone aims for, things can go wrong. If this is the case, your legal representatives know how to handle whatever comes up, so you don’t have to spend time worrying. Problems are usually quickly fixed and generally only arise because of:
- Lack of communication;
- Missing nominated appointment;
- Missing documents; or
- Minor bank errors.
You can avoid these issues by:
- Going through the documentation carefully; and
- Staying in touch regularly with your legal team, the bank and your real estate agent.
It should be noted that if for whatever reason, the settlement date needs changing for an urgent or unexpected reason, arrangements can be made. Given that contracts have been agreed and signed, the request can be denied. As a general rule, if there is to be a delay, more notice is ideal.
There is no need to worry if a delay arises because, at this stage, the contract is legally binding, and nothing will stop it from going through.
Once Settlement is Complete
After the settlement, the buyer receives the keys, and you received money from the sale. The new owner will be able to move in at their convenience.
Overall, the best way to proceed when approaching a settlement is to take each aspect as it comes because your support team – legal team and real estate agent, will assist you through whatever comes your way. We wish you well as you look at selling or buying a home and enjoying what is to come after settlement.
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