First home buyer

Buy your first home

Stage 7: Finalisation and Settlement

Catch Up with Your Conveyancer or Solicitor

After your offer has been accepted, you need to get in touch with your conveyancer or solicitor. Your conveyancer or solicitor will review your contract of sale and also undertake:

Title Search and Certificates Check

Although the vendor conducts these checks as part of preparation for the Vendor’s Statement, your conveyancer or solicitor may need to ensure that all of the information included is correct. The search and certificates provide information such as the latest owners corporation fees, a Water Information Statement, disclosures about any unregistered easements, indications from the relevant road authority showing whether the property has been acquired for road widening, building information regarding works undertaken during the previous 10 years, as well as reference to final inspections, outstanding orders and flood levels.

Draw Up a Transfer of Land

The purchaser or the purchaser’s conveyancer or solicitor is responsible for the preparation of the transfer document to ensure all pertinent information is included in the Certificate of Title of your new property. These details could include the manner of holding of a property, such as what percentage each party will be holding if more than one purchaser is involved. You can review them before signing the documents, which are sent to the vendor at least 10 days before settlement date.

Supplying Copies of Signed Documents to the Financier

This includes the contract of sale, transfer of land and title search, which allow the mortgage to be arranged.

Arranging payment

Your conveyancer will calculate the difference between the sum provided by your lender and the total cost of purchase and will organise for you to provide the difference by a bank cheque or a bank transfer into the conveyancer’s trust bank account.

Preparing a statement of adjustment

Your conveyancer or solicitor will also prepare a settlement statement. This is a document that includes details of any adjustments that are made for the purchase. For example, the seller may have already paid the council rates for three months and during the second month you will become the new owner.  So, the seller will need to be reimbursed for those two months.  Typical adjustments are water rates, council rates, body corporate fees, and so on. These statements will be prepared by your solicitor or conveyancer and submitted to the vendor for verification.

Arranging settlement with all parties

Your conveyancer represents you at the settlement with your lender and the vendor.

Notice of Acquisition

It is a legal requirement that you lodge a notice of acquisition with relevant authorities when you acquire land. Your conveyancer will do this on your behalf.

There are no set fees for engaging a conveyancer or solicitor as not all property transactions are the same. It is a good idea to obtain a number of quotes or a service recommendation. As part of the process, a solicitor or conveyancer will provide you with a Costs Disclosure Statement. This is confirmation of the fee for standard conveyancing procedures, and fees for any variations. It may also include references to other expenses which you will need to pay for, such as title searches, obtaining certificates and meter readings.

Organise Property Insurance

Technically, you are the owner of the property from the date the contract is exchanged, so it’s important you put in place some sort of home insurance cover to protect it.  This is also a requirement of the home loan approval process, so your lender will require proof of building insurance. If you’re buying a strata unit, you need to arrange a Certificate of Currency from the Body Corporate’s insurer.

Finalise Finance

Once you’ve made an offer and it’s been accepted, contact your mortgage broker or your bank so that they can finalise your home loan application. You will need to provide them with a range of documentation such as:

• Contract of Sale
• Insurance certificate of currency
• Updated pay slips
• Updated bank statements.

As part of this process, your lender may organise an independent valuation of the property to make sure that the contract price is reasonable.

Final inspection

The day before, or the morning of, the settlement you’ll have the opportunity to do a final inspection of the property. Contact the agent to arrange this.

The seller must hand over the property in the same condition as when it was sold. When you view the property for the final time you should check:

• Appliances, the hot water system, heating and cooling are in working order

• Structure, walls, light fittings, window and floor coverings are in the same condition as when you first saw the property.

• Locks, keys and automatic garage door controls are supplied and working.

• Items listed as included in the sale are in place e.g. curtains, blinds, light fittings

If you’re buying a new home, make sure all the work is finished and that the appliances are installed and working. You can organise a defects inspection by a building inspector, if you don’t feel confident checking these things yourself.

If you find damage or deterioration, it doesn’t necessarily give you the right to withhold on settlement. You need to prove that the damage breaches the conditions stated in the contract of sale. Deterioration could be the result of fair wear and tear or may have existed before you signed the contract and just failed to see it.

However, if there is substantial new damage the vendor may be in breach of the contract and you may request that it be repaired before settlement.

Occasionally, disputes do arise as a result of a final inspection. If this happens, try and work out an agreeable compromise with your buyer - it works in both your interests if you can resolve things amicably. If an agreement can’t be met, you may want to seek legal advice.

Settlement Day

On Settlement day a number of exchanges occur between your conveyancer and the vendor’s conveyancer and your lender, (you don’t need to be present), which culminate in you receiving the keys to your new home.

Here is a rough outline of what happens:

• The vendor collects the deposit money from the estate agent where it has been held in trust.

• Your lender pays the balance of the purchase price to the vendor.

• You pay adjustments for expenses such as taxes, council rates and water rates to the vendor

• You receive title of the property. The mortgage will be noted on the title until the term of the home loan is completed. When you’ve paid off your mortgage you get to keep the title, until then it belongs to your lender.

• Your conveyancer or bank will arrange to register the transfer and the home loan.

• Your conveyancer and the vendor’s conveyancer advise in writing to the agent that settlement has occurred, and that the agent can release the keys to you. It can take a couple of hours after settlement has occurred before the correct notices have been received so it is always best to ring and check if the keys are ready for you to pick up.

Be warned, that it is not unusual for settlements to be delayed by a few hours, or even a day or so due to a variety of factors like a missed signature, a cheque being delayed or incorrect paperwork.

Although it is an extremely frustrating, everybody will be working to effect settlement as soon as possible for you. Just to be safe, set your moving in date to be a few days after Settlement Day, so if things don’t go according to plan you still have somewhere to stay.

We’re here to help you

Dealing with banks can be a stressful experience but rest assured that our mortgage broker based in Glenelg (but our mortgage broker services the entire Adelaide Metropolitan area) can help you make the right decision about your mortgage. We will guide you at every stage of your loan process.

Contact us on 08 8376 0455 or drop into our office at 593 Anzac Highway, Glenelg SA 5045.

Next Stages

Stage 8: Where to From Here

Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters. Information in this article is correct as of the date of publication and is subject to change.