Working Towards Settlement
I have gone unconditional - now what?
Here is a good list of things to check off
- Nail down you home loan - you have had your finance approved but how is your home loan going to be structured? This will all need to be decided on so that your home loan documents can be created. In the dark? This is something your mortgage broker can help you with if you have one. Otherwise the structuring your home loan section may enlighten you.
- Pay your deposit - if you haven't already - your deposit, as set out in the sale and purchase agreement needs to now be paid. This is usually paid into the real estate agencies trust account or the vendors lawyers trust account.
- Talk to your mortgage broker - If you have a mortgage broker make sure they have made all the necessary arrangements with the bank. They can often be quite involved in the settlement process.
- Pay the balance - Taking into account what you have paid as a deposit (around 5 - 10% of the purchase price) and what the bank is lending by way of a mortgage (around 80% of the purchase price) there is likely to still be an extra amount of money to pay (usually around 10-15% of the purchase price). This needs to be paid into your lawyers trust account in time to be cleared funds on settlement day. Your lawyer will tell you what the exact amount is in time to do this.
- House Insurance - you will need to arrange house insurance for the new house from the possession date, and you will need proof of this to give to your lawyer.
- Ownership - If there is more then one person buying the house, discuss with your lawyer the best way to structure the ownership.
- A will - Make a will or update your current will.
- Visit your lawyer - arrange to see your lawyer and sign on the dotted line - you will need to sign:
- An authority for your lawyer to complete the transfer of the title.
- The home loan agreement(s) from the bank (if you are borrowing money).
- The mortgage documents from the bank (if you are borrowing money).
This is usually done before settlement day so that all the documents can be processed. These documents will all be available to sign via your lawyer, and your lawyer will explain them all to you before you sign.
- Pre-Possession Inspection - at least a few days before settlement you should inspect the property to ensure that no damage has been done and to check that the property and all chattels are in the same condition as at the date of signing the contract. If the inspection reveals any damage or missing chattels then notify your lawyer immediately - you may need to with-hold some money on settlement day.
- Arrange access - This usually involves picking up the house keys from either the real estate agent or from your lawyer. They will release the keys to you once they get confirmation that you have settled.
- Arrange to move!!!
Thinking about structuring your home loan?
Now you need to work out just how you are going to arrange your home loans... You will need to thing about whether you want a fixed loan or a floating loan, or a mixture of both - and how long to fix for is another question altogether!
When you start trying to predict what mortgage interest rates are doing, you will find that working out how to structure your mortgage is not so simple. For help visit our information on structuring your home loan.
What do I need to do on settlement / possession day?
If you are organised settlement day should be a breeze. You should have been to see your lawyer at least a few days earlier and signed all the relevant documentation. You may have left some of this stuff to the last minute - make sure you have checked out - I have gone unconditional - now what?
Now you are just waiting for 'the phonecall'. When it comes, which is unlikely to be before 11am, you can start! Pick up the keys (often from the real estate agent) and begin the move into your new home.
Allow yourself a few days to move in, settlement can be confirmed late in the day or can not occur until the next working day or later, so it is not a good idea to plan everything for settlement day. Hopefully everything goes to plan!