Next to your wedding day perhaps, settlement day on your first home is likely to be the most exciting and stressful day of your life.
It not only brings an end to the hard work and perseverance it takes to save your deposit and find the home of your dreams, it marks the beginning of your new life and your very own happily ever after. But how can you stop yourself from biting your nails to the quick on the day the vendor hands over the keys? Here are 5 tips to make your settlement day go smoothly.
GET A GOOD CONVEYANCING SOLICITOR
Property settlement is the legal process of transferring ownership of a property. In order to make it go as sweetly as possible, you should engage the services of a reputable conveyancing solicitor well ahead of time and ask them to explain the regulations and procedures required by the government in your state.
During the settlement process, your conveyancing solicitor will complete the following tasks:
- Inspect the sales contract and ensure enough time has been allowed between the finance approval date and settlement date to complete the paperwork.
- Prepare the documentation you need to sign – transfer of ownership, transfer of land, stamp duty application, authority to proceed, etc.
- Ensure that all the paperwork is correctly completed, verified and filed by both parties.
- Check that any existing debts or mortgages against the property are paid off.
- Perform a title search and check everything is correct with the certificate of title for the property.
- Register the transaction with all of the appropriate authorities.
- Help us to co-ordinate the necessary lender property valuation required before we can get your final finance approval.
- Work with us to ensure the cheques are ready on the day and the lender and other interested parties are present at the exchange.
CHECK THE DETAILS IN YOUR SALES CONTRACT CAREFULLY
The sales contract you sign when you agree to purchase the property is a wealth of information and very important to settlement day. It’s a good idea to get your conveyancing solicitor to check it before you sign or put down your deposit so that you are sure it provides all of the required information.
Your sales contract should outline all of the conditions of the sale, what is included in the sale, what actions are required to complete the sale, the schedule for completing these actions and who is responsible for completing them. If you show your sales contract to your conveyancing solicitor before you sign it, you can ask questions about anything you don’t understand.
GET YOUR FINANCE IN PLACE BEFORE YOU SIGN THE SALES CONTRACT
Settlement day is the big day when your mortgage comes into effect and your chosen lender pays the money to the vendor. To ensure your settlement day goes according to plan, it’s vitally important to get the timing right on this transfer of funds.
During busy periods, it can take several weeks for a home loan to be approved by some lenders. If you don’t want to limit your choices to the few lenders who are able get your loan through according to the timing on your sales contract, then it’s a good idea to talk with us and check the turn-around time a lender will need to process your loan before you sign the sales contract, so you can make sure it allows enough time.
You should also bear in mind that any other government fees, charges and duties must also be paid on settlement day. Just ask us and we’ll help you calculate these costs.
GET INSURANCE AND DO A PROPERTY INSPECTION
A lot can happen to a property in the time between signing the sales contract and collecting the keys. It is likely the property will be vacant during this time and to ensure there are no break-ins, thefts, storm damage or worse, you should include a clause in the sales contract allowing you to inspect the property just prior to settlement day to see for yourself that everything is still in good order.
To make sure you’re fully covered for any insurable event, it is also a good idea to take out insurance on the property when you sign the sales contract. It is not a good idea to trust the vendor to keep the property fully insured until settlement day. Insuring it yourself could save you money and trouble if something should go wrong, so don’t forget to ask us if you need help organising some cover.
SET YOUR MOVING DATE IN A FEW DAYS AFTER SETTLEMENT DAY
Delays can happen on settlement day, no matter how carefully you plan. People can miss meetings or take the day off sick, cheques can be held up, even the weather has been known to throw up unexpected obstacles to make completion impossible on the set date.
We recommend that on settlement day, you find a relaxing place to wait for the news that settlement has been successfully completed and to receive the keys. If you plan to move into your dream home a day or two later, you’ll have the time to sit back and enjoy the experience of becoming a new home owner before you need to do the heavy lifting required to actually get your stuff in there and start living happily ever after.
As your mortgage and finance broker, we’re here to help you make sure that you can complete the purchase of your new home with as little hassle and stress as possible. Ask us to help you get pre-approval on your home loan, and if you need a referral to a good conveyancer, we’ll be happy to help with that too.
FINANCE FOCUS | NOVEMBER 2016
The information provided in this page is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs. You should seek independent advice from your financial adviser before making any decisions.
AUSTRALIAN MORTGAGE AND FINANCIAL ADVISERS (AMAFA)
Phone: 07 3378 2056
Fax: 07 3378 2069