What is a property settlement?
Understanding the settlement process when buying a home can be a bit confusing if you aren’t familiar with how it all works. When you sign a contract of sale to purchase a property, the settlement date refers to the legal date that the ownership of the property passes from the seller to you. In Queensland, property settlement periods are usually between 30 and 90 days, although it is possible to have a shorter settlement period if both parties can settle earlier, or a longer settlement period if both parties agree.
How does a property settlement occur?
Taking place on a date agreed between you and the Seller at the time of signing the contract, settlement day is the day your conveyancer will meet with the seller’s legal representatives to sign the final documents of sale and pay the balance of the purchase price on your behalf. These final documents are then sent to the titles office to register you as the new owner of the property. On the day of settlement, your conveyancer will:
- Check any existing mortgage on the title to the seller is discharged
- Ensure any third party or person who has rights over the property (a caveat) is removed
- Ensure all clauses on the sales contract are fulfilled
- Check the transfer of land and mortgage is registered with the title office in your state
How to prepare for your property settlement
It is important to ensure that you carry out one final inspection before settlement day, usually the day before. The point of this final inspection is to ensure the house is in the same condition it was when you signed the contract.
To avoid any delays with settlement, ensure that all documents requested by your conveyancer and bank are signed and returned to them on time. The most common delay for settlement is the bank not being ready to settle, and this is often caused by paperwork not being lodged in time.
In most cases, settlement occurs later in the afternoon, which can often make it difficult if you are wanting to move in on the same day. If possible, see if you can arrange your removalist for the day after settlement, or at least 1-2 hours after the time of settlement. Your conveyancer will be able to let you know what time settlement is booked for.
What happens after settlement?
Once settlement is completed, your solicitor will notify you and the real estate agent. You will then be able to collect the keys and take possession of the property.
If you are purchasing a property in Cairns, get in touch with the team at Cairns Conveyancing Solicitors. Our team of expert conveyancers will be able to talk you through the process of buying a property.