We hear a lot of reference to settlement day when we buy our first home. But what exactly is settlement day and why should I care? Settlement day is the day ownership is transferred from the seller to the property buyer. There’s a lot of preparation before the day comes, and you may feel a little bit overwhelmed if you aren’t armed with the facts.
On that day, you can expect a lot of things to occur and here are a few of them so you know what to expect.
What does “Settlement” mean?
Settlement is the legal term used when the vendor transfers the ownership of the property to the buyer. Appropriately termed, it means that after this, you are free to settle in. While you and the seller can be present during the transfer of documents, it usually is the representatives or conveyancers of both parties that attend.
Things that Occur During Settlement
Basically, what happens is that your representative gives the remaining balance owed on the property, while the seller’s party hands over the deed title. Depending on the situation, however, there may be more people involved but this is a basic handover.
If you are financing your purchase through a home loan, someone from your lender’s side will be present during the transaction. At the same time, if the seller still has mortgage, that party will appear on the settlement day as well.
One of the tasks your conveyancer is responsible for is to ensure no one else has any claim to the property after settlement aside from you and your lender if applicable.
What to Prepare
Before the settlement day arrives, here are a few things you need to do to make the process smooth and seamless.
1. Get legal representation
Finalising the transfer of title could be a complex process, so it is best to have either a solicitor with you. He/ she can advise what you need to know about different fees you’ll need to pay
2. Advise your lender of the date beforehand
It’s always prudent to let your lender know when the settlement is. This allows them to prepare the sum of money needed to fully pay the property so you can move in.
3. Obtain relevant insurance
You should secure insurance for the building and its contents effective on the day of the settlement. At the same time, you should arrange for a final inspection of the property.
Why the Final Inspection is Important
It’s always exhilarating to know that you’re almost the new owner of a property, but you have to thoroughly inspect the area before the day of the settlement. This is to ensure that everything is in the condition you agreed upon during the initial purchase process.
If you notice anything that’s been altered, you should reach out to your legal representative and see what should be done to have things resolved.
After the Settlement
Once it is done, you’re free to take the keys to your new property!
If you have a lender, they will take the amount they paid in your behalf from your home loan account. Meanwhile, your solicitor or conveyancer will disclose information regarding the payments, where it goes, and other fees.
And you’re done! For a more seamless transaction, we at CS Conveyancing are more than capable of helping you.