What to Expect During the Settlement Process
Settlement day marks the official end to months (or even years!) of house hunting and the beginning of life in a new property. Settlement is a legal process where ownership passes from the seller to the buyer, allowing them to legally take ownership of the property. So what can you expect during the settlement process? We take a look at the steps involved and what happens on settlement day.
How long does it take to get to settlement?
You’ve found the right property, exchanged contracts, paid a deposit, and the cooling off period is over… so what comes next? Settlement is the next step on the road to homeownership. Settlement day is usually set by the seller in the contract of sale, and generally occurs 30 – 90 days after your contracts are exchanged. The period before this is referred to as the settlement period. During this period, your lender will sign off on your mortgage and your representatives will prepare all necessary documents.
Who attends settlement day?
The buyer and seller usually do not need to attend settlement day, rather the process is carried out by their settlement agents (a solicitor or conveyancer). The settlement agents meet at an agreed time and place to exchange documents.
What happens on settlement day?
Settlement day is the official time when ownership of the property is transferred. On settlement day, a buyer’s lender will organise for the balance of the purchase price to be paid to the seller. The buyer’s loan is drawn down, the buyer starts owing their lender, and a mortgage is registered against the title of their new property.
The settlement agent checks all the legal documentation and ensures any existing mortgage on the title is discharged, removes any third party who has rights over the property and checks that all elements in the contract of sale are fulfilled.
When all documents have been signed correctly the settlement agent arranges for these to be sent to the titles office to officially transfer the title and register your mortgage. The settlement agent should then send a letter (generally an email these days) to inform the buyer that settlement is complete and funds have been paid.
How soon after settlement can I move in?
A settlement agent will notify the buyer shortly after settlement, and at this point, a buyer is free to collect the keys (from either the settlement agent or real estate agent) and start the big move.
What can go wrong?
If you’ve engaged experienced professionals to help you with settlement, then things should go smoothly. Setbacks are rare occasions, but can usually be associated with delayed finance, missing signatures or concerns with the final property inspection. However, most of these issues can be resolved on the day and both parties are generally willing to try and resolve matters quickly.
Be sure to provide all necessary information and documents to your settlement agent to ensure the settlement process takes place without a hitch.
At Mortgage House, we are no stranger to the homeowner’s journey. It’s a long (but rewarding) one.
If you’re about to embark on your homeowner journey, we’re here to help. Contact us for the best options when it comes to your mortgage and we’ll be there from settlement day and beyond.