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Settlement day is the day on which you pay the remaining balance to the vendor, and the property is transferred into your name. Settlement day is the final step in the process, and is a day to celebrate not only your new home, but also the hard work you have put in to get to that point.
There are several tasks you need to complete before settlement day. Once you know the date that you will take over the property, make a list and arrange the following as soon as you can:
1. Signing mortgage and transfer documents with your lawyer
In the time between your agreement to purchase becoming unconditional, and your settlement date, you will need to meet with your lawyer to sign the important mortgage and transfer documents. These documents are what will allow your lawyer the authority to complete the purchase on your behalf. Your lawyer will let you know when you need to sign these documents – this is this is usually within a week of settlement day. You need to take the following items to your appointment:
If you are borrowing money from a bank for your purchase, you will be required to insure the property and provide evidence of this to the bank. You should set up your home insurance to begin on settlement day. Once you have the policy in place, request a certificate of currency from your insurer, and make sure that your lender is listed as an “interested party” on the certificate. You will then need to provide this certificate of currency to your lawyer, so that they can advise your bank that insurance is in place.
If you require a moving truck, you will need to organise this ahead of time. While settlement day is also “move-in day”, you should be aware that settlements don’t always run smoothly, especially if there is a tenant in the property, or if the vendors are also moving out on settlement day. We do not want to see purchasers in a position where they have their moving truck waiting outside the property waiting for an issue to be resolved. Therefore, it is a good idea to organise your moving truck to arrive the day after settlement if you can or, if you do need to move on the settlement date, schedule that for the afternoon of that day.
4. Power, gas and broadband etc
Connecting services in time for your settlement date is important. That way, you can move in without delay. Contact your current service providers and advise them of your new address and need for connection on settlement day – most services can be transferred to new properties, but it is a good idea to organise this as soon as you can in case you need to go with a different provider.
It is common for rates to be apportioned for settlement day because rates are charged in instalments, and the vendor may have already paid the rates in advance. Your lawyer will explain how a rates apportionment works and let you know when the next instalment of rates is due. On settlement day, your lawyer will notify the local council that you are the new owner of the property and provide your postal or email address for service of future rates invoices.
6. Pre-settlement inspection
As a purchaser, you are entitled to undertake a pre-settlement inspection of the property. If there is a real estate agent involved, you will organise this through them. If not, talk to your lawyer. During the inspection you should check that the chattels at the property are in working order, unless disclosed otherwise in the sale and purchase agreement. This inspection should be completed one or two days before settlement, allowing time for you to report any issues to your lawyer no later than the day before settlement, and allowing time for your lawyer to remedy these issues before settlement day.
On settlement day, there is not a lot for you to do apart from moving. A lot of work is done behind the scenes by your lawyer, who will manage your payment and settlement with the vendor’s lawyer.
Once your funds arrive from your bank into your lawyer’s trust account, your lawyer will pay this money over to the vendor’s lawyer, and the property will be transferred into your name. Your lawyer will contact you once this has been completed, and you will be able to collect your keys from your lawyer or the real estate agent.
Summary of key points for settlement day
To summarise, it is important to be prepared for settlement of your purchase. Once you know the day that your settlement will occur organise insurance, service connections, and any assistance you need with moving. If you have any questions about settlement you should speak to your lawyer.