What Do I Need To Do Before My Property Settles?
5 Critical Steps to Getting Ready For Settlement Day
Settlement day is the day that you take ownership of the new home that you have purchased. We have put together a guide to explain what happens and what you need to do to prepare your home to hand over to the new owners.
Settlement day is a celebratory day which finalises what can feel like a long and drawn out process.
1. What does Settlement mean?
Settlement is the official legal term for what happens when the vendor (seller) hands over ownership of the property to the buyer. Neither the vendor or the purchaser will witness the physical settlement of the property. Generally, settlement day involves both parties legal representation settling the property.
2. What happens on settlement day?
Your legal representative will handle the settling of the property and will liaise with any financial institutions representatives and your real estate representative to ensure the property settles successfully with all required documentation. They will then organise the disbursement of funds to mortgages and real estate agents commission payments.
3. What do you need to get prepared for settlement day?
Settlement can be a complicated legal process, and it is recommended that you engage in legal representation. They will help guide you through the process and make sure you know how much you’ll need to pay on settlement, including any stamp duty, council rates, lenders mortgage insurance (LMI) and other fees such as commission (for the seller).
Aside from organising a legal representative, you should let your mortgage lender know the date of settlement. That way, they’ll make sure you have the funds you need to complete the purchase.
On top of this, you are required to organise building and contents insurance that’s effective from the unconditional date - you may be required to provide a copy of the policy cover letter. Lastly, you need to contact the vendor’s real estate agent to arrange a final inspection of the property you are buying - make sure you book this as close to the settlement date as possible.
Aside from the legal aspect of things, it is encouraged that sellers prepare their home and gardens to be presented neatly and tidily for the new homeowner. We have available a complete checklist available for download here to ensure you have a seamless pre-settlement inspection and settlement day.
4. What happens at a final inspection?
It is recommended that you complete a final inspection of the property on the day before settlement. This is your opportunity to make sure that property is in the same condition that it was in when you placed the contract on the property. If you are purchasing the property as an investment and aren't able to attend the pre-settlement inspection, then we recommend you arrange with your property management company that they attend on your behalf. Take your time to test that all the chattels are in the condition they were prior and that the appliances work correctly, as well as the hot water system and the air conditioning or heating. Check that the fixtures or fittings you’ve agreed to purchase, such as light fittings, floor coverings have been left and that there is no new structural damage. You should also make sure that the keys and any garage remotes work.
If something isn’t as you expected it would be or not in the same condition that it was prior, contact your legal representative immediately so that they can resolve it for you before settlement. Once a property has settled there is not a lot that can be done legally to compensate you for items that may be missing or broken again this is something that your conveyance / legal representative will be able to advise you on.
5. What happens after settlement?
Once settlement happens, you will be notified by your conveyancer and your real estate representative who will then advise that you can collect the keys to your new property from the vendor’s real estate agent. You can now begin enjoying your new home!
The information contained in this article is intended to be informative only. Parry Property is in no way providing legal or financial advice - Parry Property recommend you seek independent legal and financial counsel from a broker/ institution/firm of your choice when completing a property purchase transaction.