Selling a house successfully is a wonderful achievement – and definitely something worth celebrating. Before you pop that champagne cork though, it’s wise to familiarise yourself with what you may face during the settlement period.
The time leading up to settlement comes with a lot of expectations – and sometimes, some stress – on both sides of the selling/buying fence. For your incoming buyer, they want their hands on that all-important set of house-keys. As the seller, your focus is different – you want the evidence that the final payment on your property has gone through to prove the property sale deal is done.
To get you there without the headache, it helps to understand the process.
What is settlement?
This final step in your property sale process takes place after you, as the seller, exchange contracts of sale with the buyer of your property. On settlement day, any financial arrears and obligations connected to the property must be settled.
Meanwhile, the buyer (or their lender) pays the remaining agreed amount, and the title is transferred to the buyer, who then takes both physical and legal ownership of your property. For you, it’s the day to vacate.
What may delay property settlement?
Settlement periods vary and can take anywhere between 28 days and 90 days. The exact date of your own settlement period is something that is agreed to by both parties and is clearly outlined in the contract of sale document.
Delays do happen and complications around finance is a common cause. With so many forms to sign and process, missing a signature on one section of a form, or not having access to the right identification can all play a part in a lender delaying proceedings. It’s a reason why working with an experienced conveyancer can save you time and money.
To ensure you are on the right track, talk to your conveyancing team with any questions.
Depending on which party causes the delay in settlement, and the state or territory the sale took place in, the penalty for delays to the settlement day include interest and/or additional costs. Valuations can also be problematic, and if finance falls through for the incoming buyer, your conveyancer or solicitor can help you understand your options. Making time to have a final inspection may also cause a delay, especially if the buyer feels that you have not left the property in the condition they expected.
As a seller, you have rights, but you also have responsibilities, so talking to your conveyancer to be clear about your obligations is always important.
Simultaneous settlement
If you are selling one property at the same time you are buying another, some careful planning and attention to detail is needed to make sure that coordinating both settlements at the same time runs as smoothly as possible.
Talk to your conveyancing team to discuss the possibility of adjusting the settlement period to give you the time you need, explore whether you can negotiate your contract to make your purchase ‘subject to completion of sale’, or speak to your financial advisor to see if applying for a bridging loan may help you achieve settlement more easily.
Steps towards settlement
To settle successfully, it’s critical that the property matches up with its title and details. When a lender organises a valuation, your incoming buyer will be checking for a variety of details, including property measurements matching what is in the records.
The transfer of the property title is a key part of the settlement process. Your solicitor or conveyancer will be responsible for handling this process but, because it is your signature on the contract, it’s important that you understand the process clearly.
On settlement day, provided all contract of sale conditions are met on both sides, the incoming buyer of your property will officially take ownership of the title.
Digital conveyancing convenience
Within the conveyancing industry, the transition to electronic settlement through PEXA actively reduces any potential issues with bank and human error and provides you a clear track record of every aspect of your settlement process. You can read more about what PEXA is here.
Congratulations on your sale
No matter how long your own settlement period is, when the big day does come, it’s important to celebrate it – and all the hard work it has taken you to get there.
Selling a home isn’t always easy – especially in a fluctuating market – so taking time to reflect on your achievement and doing something special to mark the occasion is a wonderful way to complete your settlement day in style.
Have a question about the process? Or want to speak to a member of our team?
We’re here to help. You can get in touch on 1300 932 738.
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This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.
