With a little understanding and the right preparation, you’ll be moving before you know it. Here’s what to expect during the settlement process:
Conduct a final property inspection
Arrange a final inspection of the property shortly before settlement. This allows you to make sure the property is in the same condition as when you agreed to purchase it. Check that all fixtures, fittings, and inclusions are present and in working order. Notify your conveyancer immediately if any issues are identified.
Secure your financing
If you’re buying the property with a mortgage, ensure your home loan is fully approved and the funds are ready for settlement day. Your lender will coordinate with your conveyancer or solicitor to manage the financial transactions.
Transfer additional money required for settlement
Your conveyancer will inform you of the funds required to complete settlement as part of your settlement statement. Share your settlement statement with your lender so they can confirm there is enough money available for you to settle. Your conveyancer will ensure that all money required for the purchase are transferred to the seller, office of state review and relevant government authorities.
It’s important to have building insurance in place from the date of settlement, or even from the exchange of contracts, depending on the terms. Check with your conveyancer for specific advice regarding insurance and arrange insurance with your insurance provider.
What does settlement date mean?
The property settlement date refers to the final step in the sale process of a property, where the legal ownership is transferred from the seller to the buyer. On settlement date, several key actions occur:
- Completion of financial transactions: The balance of the purchase price, along with any adjustments for rates, taxes, or other costs, is paid by the buyer to the seller. This is typically managed through the conveyancer or property lawyer and financial representatives of both parties.
- Transfer of legal documents: The legal documents required to transfer ownership, such as the title and transfer documents, are exchanged. These documents are usually prepared in advance by the conveyancer or property lawyer of each party.
- Registration of the new owner: The buyer’s conveyancer or solicitor will lodge these documents with the relevant land registry to update the title of the property, officially recording the buyer as the new owner.
- Release of keys and access: Once the settlement is successfully completed, the buyer usually receives the keys and is granted access to the property.
The settlement date is agreed upon during the negotiation phase and is typically specified in the contract of sale. It’s a crucial date for both the buyer and the seller, as it marks the completion of the property transaction.
What happens on settlement day?
On settlement day, your conveyancer will meet with the seller’s representatives and any financial institutions involved to exchange documents and transfer the funds. They will ensure that all legal documents are correctly signed and lodged.
After settlement, the title of the property will be transferred to your name. Your conveyancer will handle the registration of the property with the NSW Land Registry Services.
Once the settlement is complete, your conveyancer or solicitor will confirm the completion of the transaction, and you will receive the keys to the property. They will also provide you with a final statement of accounts.
What happens if settlement is delayed by buyer in NSW?
If a property settlement is delayed by a buyer in NSW, there can be several consequences and potential actions that may be taken, depending on the circumstances and the terms of the contract of sale:
- Penalty interest: The buyer may be required to pay penalty interest to the seller for each day the settlement is delayed. The rate of this interest and the terms under which it is applied are usually specified in the contract of sale.
- Legal and additional costs: The buyer might also be liable for any legal or additional costs incurred by the seller due to the delay. This could include costs associated with the seller having to extend their own property purchase or temporary accommodation costs.
- Notice to complete: The seller may issue a ‘Notice to Complete’, which gives the buyer a specified period (often 14 days) to settle. This notice makes time of the essence, meaning that if the buyer fails to settle within this period, they could be in breach of contract.
- Breach of contract: If the buyer fails to settle after a Notice to Complete has been issued, the seller may have the right to terminate the contract. In such a case, the seller could keep the buyer’s deposit and may also have the right to sue for damages or to resell the property.
- Negotiation and extension: In many cases, both parties prefer to avoid the legal and financial complications of a delayed settlement. They might negotiate a new settlement date, especially if the delay is due to unforeseen circumstances or issues with financing.
If the delay is due to financing issues, the buyer should communicate promptly with their lender to resolve any problems. It’s crucial to keep all parties, including the conveyancer or solicitor, informed.
It’s important to note that the specific consequences and options available will depend on the terms of the contract of sale and the circumstances of the delay. It’s always best to aim for proactive communication and negotiation to resolve settlement delays amicably where possible.
We recommend you stay in close communication with your conveyancer or solicitor throughout this process to ensure all legal and financial matters are handled properly and efficiently. Additionally, timelines and requirements can vary, so adhere to any specific instructions or deadlines provided by your conveyancer, solicitor, or lender.
Learn more about the buying a property with our ultimate guide to buying a house in NSW.
Need help on how do I prepare for settlement in NSW? Speak to one of our team.