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  • What comes next? The 5-step process to settling on a home

    What comes next? The 5-step process to settling on a home

    You’ve won at auction or secured your private offer, but that doesn’t mean your property purchase is a done deal. There are a few more key steps in the settlement process.

     


    After you’ve signed your contract of sale and ‘bought’ your new property, you enter a settlement period which typically lasts one to three months.

    Financing, inspecting, securing and signing endless amounts of paperwork  now stand between you and your property purchase.

    RAMS Sydney Eastern Suburbs Franchise Principal Alistair MacIntosh explains what you need to know about the settlement process.

    Step 1: Add your lawyers to your speed dial

    Your conveyancer or solicitor will be an ongoing point of contact throughout this process, so best add them to your speed dial.


    5-step-process-to-settle-man-on-phone

    Take it from us, you’ll be chatting to your conveyancer a lot. Picture: Hassan Ouajbir

    “It’s important you talk to your solicitor regularly to ensure the sale is on track, not only from your financier’s point of view but from the outgoing party’s point of view as well,” Alistair says.

    “Quite often settlements can be delayed because there are problems with the lender preparing the discharge or there may be caveats lodged on the property that need to be removed prior to settlement. There are a lot of things you need to make sure your solicitor is across.” 

    Step 2: Get your finances in order

    You may have paid your deposit already – especially if you bought at auction which requires an on-the-spot down payment – but next you’ll need to get the rest of your cash in order.

    Even if you had conditional or pre-approval before putting in an offer, you then need to seek unconditional approval and formally secure your loan.

     5-step-process-to-settle-laptops

    Ensure you have all your finances in order. Picture: Scott Graham

    “Your lender will ask you to provide them with a copy of the signed contract of sale, at which point they will be able to instruct the valuer who will arrange to inspect the property,” Alistair explains.

    “You should also meet all of the other approval conditions at this time to avoid any delays with the final approval from your lender. This may include providing evidence of any credit cards being cancelled or limits being reduced and providing evidence of funds in your bank account.”

    To make this process easier, it’s best to have the documents ready to go as soon as possible. Chat to your home loan specialist who will help advise you on everything you need for this step.

    Once your mortgage is approved and signed-off, you can proceed with organising the final settlement date with the seller.

    Step 3: Get insurance

    The responsibility of insuring the property differs in each state. However, Alistair recommends having it as a protective measure.

    “I’d strongly recommend that as soon as you buy the place, you take out home and contents insurance so you’re covered in the event something were to happen to the property,” he states.

    “Regardless of [if anything were to happen to the property], you may still be committed to settle.”

    Step 4: Pre-settlement inspections

    Prior to settlement day you will need to do a round of pest and building inspections.

    “You need to arrange a pre-settlement inspection to make sure everything is as stated in the contract of sale and you’re happy with the condition of the property,” Alistair advises.

    5-step-process-to-settle-dining-room

    Enlist professional inspections to ensure everything is in order. Picture: Michael Glass

    The key here is making sure the property is as it was when you agreed to buy it.

    Even on settlement day, it is recommended you give the property one final look to ensure everything is in order before taking that final step.

    Step 5: Settlement day

    Settlement day is usually agreed upon between you and the seller. On this day you can be as hands-on or hands-off as you wish; many of the responsibilities can be deferred to your solicitor.

    First, however, there is the settlement adjustment, which outlines any changes to the cost, such as council rates and stamp duty. The seller may also be required to pay any outstanding bills, which could be deducted from the sale price.

    5-step-process-to-settle-house

    After the keys are exchanged, the house is officially yours. Picture: J Brew

    After this is all taken care of, you’re free to make the final sale.

    In the days of yore, you may have had to be physically present to sign documents. These days, it can be taken care of online.

    “Now settlements are normally automated through the PEXA settlement system (a secure digital platform). Once confirmation has gone through, your solicitor or conveyancer will notify you and you can arrange to pick up the keys. At that point you will have ownership of the property,” Alistair explains.

    Now all that’s left is moving in and kicking back in your brand new home.  

    Originally published on realestate.com.au ‘What comes next? The 5-step process to settling on a home’  

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    About the author

    • Raymond

      Raymond A Ram is the RAMbassador for RAMS Financial Group. Raymond works with the RAMS team to bring simple, helpful and expert information on home loans and savings accounts to life with his down to earth and cheeky personality. He enjoys seeing everyday Australians turn their dreams of saving for a goal or getting into a home a reality. 

      Growing up in Goulburn, NSW, Raymond was brought up with good old-fashioned Aussie values of hard work and a fair go. It soon became apparent that Raymond wasn't content for the conventional path of grazing, producing the very best wool, and finding a nice sheep to settle down with. So it wasn't long before his passion for performing and his talent as a likeable larrikin shone through - landing him a few roles such as 'RAMlet'. He was even tipped to play RAM-bo at one point but chose to become star of the small screen instead as RAMbassador for RAMS. He now finds this role so much more rewarding.

      Contact your local RAMS Home Loan Centre about your home loan options.

      Raymond A Ram

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  • Disclaimer:

    This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.