What is settlement?
Settlement, or the Completion Date under a Contract, is essentially the day a Purchaser hands over the money to buy a property and in return is provided with the title documents and the keys.
In New South Wales settlement takes place in one of two ways:
In person via a paper settlement – this is still the most common way for settlements to proceed. It involves the legal representatives for each party (the buyer and the seller) as well as their banks meeting in person at a scheduled time. At this meeting the title documents and bank cheques are exchanged between the parties. The Certificate of Title, Transfer and any Discharges of Mortgage or new Mortgages are then sent to the Land Registry for registration.
PEXA/Online settlement – the online settlement portal allows for a settlement to take place electronically without the need for the parties to physically meet. Funds are transferred electronically and the title to the property is transferred into the new owners names immediately on settlement.
What do you need to do to prepare?
Usually the settlement date is a set number of days after the exchange of Contracts, usually 42 days (6 weeks), so hopefully you have had plenty of time to prepare.
For a Vendor (owner) – you need to vacate the property prior to the settlement date. The property should be left in a neat and tidy condition inside and out. You should also contact your service providers (electricity, gas etc) and let them know you are moving. Your insurance for the property needs to stay in place until after settlement.
For a Purchaser (buyer) – you will need to do a final inspection of the property prior to settlement. This is essentially your ‘last look’ at the property before handing over the purchase money. The property should be neat and tidy and in the same condition it was when you made your offer. The final inspection is arranged through the selling agent who will meet you at the property.
Insurance – the Purchaser needs to take out an insurance policy for the replacement value of the property that is effective from the time that settlement takes place. If you are obtaining finance to assist with the purchase your bank will probably specify a figure that they want the property insured for. They will also require the bank’s name to be noted on the policy as mortgagee.
Prior to settlement the Purchaser should contact their preferred service providers and arrange the connection of utilities on the settlement date.
What can go wrong?
Unfortunately there are times when settlement doesn’t take place on the due date. This can be for many reasons, sometimes it is simply a matter of a document not arriving on time. Rest assured your Solicitor or Conveyancer will do everything they can to avoid delays to settlement, we know you are keen to move on or move in!
When can I have the keys?
As soon as settlement takes place your Solicitor or Conveyancer will let you know. You can then collect the keys from the selling agent and move in.
Are you looking to buy or sell a property? Speak with our Property Law team today at Everingham Solomons because we have the expertise & experience to assist you in your property transactions because Helping You is Our Business.
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