Whether you’re buying or selling a property the transaction all culminates with what is referred to as Settlement Day. In this article CRAIG WILSON, CEO of PiC Group, reveals what really does go on behind closed doors on what is an exciting day for both buyers and sellers.
The day is finally here and it is just as exciting for both the property buyer and seller.
For the buyer, settlement day is basically the day they officially take over the property and day one of their mortgage.
For the seller, this is the day they will be taken off the Title of the Property, and receive the balance of funds from the sale.
Why is it called settlement day?
Settlement day came from simply being the day that everything is settled.
In the lead up to settlement day a lot of the work happens behind the scenes between Mortgage Brokers and Solicitors.
Then a day is prearranged, where your legal representative will meet the other sides representative in a room full of other people doing the same thing.
It’s in this room they hand over cheques.
Behind the scenes on settlement day?
The Lender for the buyer authorises payment to the vendor (seller).
The buyer’s representative (usually a solicitor) will authorise the vendor to collect the deposit money from the Agent where it has been held in trust.
Both parties pay any adjustments or reimbursements – taxes, council and water rates that have been pre-paid etc.
The Buyer then receives Title of the Property.
Next your solicitor or bank will arrange to register the transfer and the home loan.
The mortgage will be noted on the Title of the Property until the term of the loan is completed.
How do buyers and sellers find out if settlement happened?
Solicitors notify all parties that settlement has occurred, you will get a settlement statement and an official letter stating it all happened.
Usually at this time if you have a Buying or Selling Agent they will give you a call and congratulate you and talk about the steps for handing over keys.
My tip for settlement day:
Don’t plan on moving all of your possessions on that day (unless you have prearranged accommodation).
Sometimes settlement can have delays and it can get pushed back hours or days. Definitely speak to your Agent and discuss when it gets closer how everything is going and when might be a good time to have the removalist truck come.
For now, pop the champagne!
Craig is the founder of PiC Group since 1993 and SiNC Surveys, and a successful private investor in his own right, coming from a background in the insurance, financial planning and real estate development industries.
General Advice Warning: This blog is not designed to replace professional advice. It has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the advice, in light of your own objectives, financial situation or needs before making any decision as to what is appropriate for you.