Here are the answers to 5 common questions asked about the all important settlement process.
Settlement can be a complex and edge of year seat process, that most of the time is only finally resolved on settlement day, which is why most of my Scarborough and Osborne Park clients need a little guidance when it comes to settlement and dealing with their settlement agents. If you want to know more feel free to email me or give me a call.
...Now onto settlement day!
1. What Actually Happens on the Day of Settlement?
While the settlement process is slowly going digital, for the time being settlement day involves your settlement agent physically being in a room with the seller's settlement agent, and rapidly exchanging titles, cheques and other documents in a process that lasts only a few minutes.
Each agent quickly checks off the actual funds changing hands with what is expected, and if it’s all above board then just like a one night stand, it’s over just as quickly as it started.
However if something’s out of line the whole settlement can fall over and need to be postponed, which is why it’s always a good idea to confirm your shortfall account is set up with your lender prior to settlement, and is something your broker should organise when you sign your loan documents or while applying for your home loan.
Download our Step by Step Guide to purchasing property to find out more!
2. What Does my Settlement Agent Actually Do?
Settlement agents are also sometimes called conveyancers and even though you will need to appoint a settlement agent as soon as possible once you sign a contract of sale the settlement agent’s work really starts once your finance has been unconditionally approved.
As a general rule of thumb you want a settlement agent that also qualified a lawyer so that they can give you sound advice on what to have in your contract of sale prior to signing.
That’s why we partner with MDH Legal in Osborne Park, who are able to offer both services. Just so we’re clear, there’s no fee paid for us recommending them, we’ve just dealt with them time and time again with glowing recommendations from our clients.
Once you appoint a settlement agent they will be able to help you with;
coordinate settlement date and time with your lender and the seller’s settlement agent
attend settlement on your behalf, and let you know once settlement has occurred
transfer the title of the property to the buyer (you)
prepare, and verify, all necessary documents to enable settlement to occur
liaise with your mortgage broker, lender, and real estate agent (if applicable) to ensure your finance is in order, your final inspection has occurred, and all parties are ready for settlement
adjust your rates and taxes so that you pay only for the exact number of days in the year that you have owned the property. The seller is responsible for rates up to and including the day of settlement. You, the buyer, are responsible from the day after the settlement
pay outstanding monies to local council, water and land tax authorities (and strata company if applicable), and transfer the accounts from the seller to the buyer (you)
provide you with a statement showing monies due from you to settle your purchase
Your settlement agent is also there to answer questions you may have about the process.
3. What are the Main Reasons for Settlements to be Delayed?
Delays can be frustrating, particularly if you are moving and everything’s already been organised. Delays can also be expensive if you're trying to buy and sell at the same time and you’re causing the delay. Penalties in some cases may apply if you, or a party linked to your settlement is a cause of the delay.
The most common reason for a settlement delay is because documents weren’t signed properly, or some required documents are simply missing.
The best way to avoid these types of delays is to (1) be proactive, and turn your settlement documents and loan documents around as soon as possible, (2) try and ensure you sign your documents correctly and in all the correct spots – if you are unsure ask your settlement agent for help with your settlement documents and your broker/lender about your loan documents.
4. Why are my Fees Higher if I’m Buying Instead of Selling?
When buying a property, your settlement agent needs to perform more complex and comprehensive searches. This is why your professional fees and search fees are higher for property buyers than for sellers.
5. How do I Find a Settlement Agent that is Right for Me?
You’re looking for a settlement agent that, not only offers fair/reasonable fees, but more importantly one that you can trust and can give you legal advice.
With one of the most expensive purchases you will probably make in your life, you need an agent you’re confident in, who will work for you, and will do everything to ensure that the settlement process is as stress-free as possible.
Beware Rock-Bottom Fees!
Whilst you will find a number of agents offering large discounts on their fees, sometimes the cheapest fee isn’t always the best move, as you don’t want an agent that will try to pass the blame of any mistakes.
Cheap agents are cheap for a reason. Often, they are so overwhelmed with the sheer volume of work that they simply can't dedicate the time and care required to properly look after your file and ensure all is done and available on time.
If you’re comparing the fees of agents make sure you choose someone you know will look after you - or someone who has been recommended to you.
Remember, a good settlement agent is always available to answer any questions you may have, no matter how ‘obvious’ you may think they are.
We take the stress out of the home loan process
We have access to hundreds of different home loan products from our panel of lenders - to make sure the loan you choose is the right one for you.
If you want to book an appointment or are just interested in having a chat, feel free to either call Jason Coviello on 0438 211 745, or send through any questions via email to email@example.com
If you’d rather be social about it, feel free to head across to my Facebook Page and see if there’s already an answer to your question or pm me.
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