Buying a house is an exciting, and sometimes stressful process, and that is never more true than on settlement day.
You’ve found your dream property, put in an offer, signed the contract, and had your conveyancing solicitor assist you to navigate all the milestones in the contract period, such as building and pest and finance conditions. But it’s not quite time to collect the keys yet!
What Is Settlement?
Property settlement is the process by which ownership of property is formally transferred. The legal and financial representatives of both the buyer and the seller will meet (either in person or online through an electronic settlement platform such as PEXA), and do everything necessary to transfer the legal ownership of the home from the seller to the new owner.
How Does The Property Settlement Process Work?
1. Money Changes Hands
On settlement day, the balance of the purchase price is paid to the seller. Any commission owing to the real estate agent is paid to them, and other fees and charges, such as your conveyancer’s fee, are also paid.
Buyers need to ensure that they have sufficient funds available to cover all the payments due at settlement.
2. Seller’s Bank Receives Loan Account Payout And Releases Mortgage
If the seller has a registered mortgage on the title, this is usually discharged at settlement, and the balance of the seller’s loan is paid.
3. Final Documents Are Signed And Exchanged
During the settlement process, all the documentation is finalised. Once this occurs, transfer documents are sent to the Titles Office and the new owners are registered.
Once this occurs, the buyers will assume legal ownership of the property, and be able to collect the keys from the real estate agent and start moving in!
How Do Conveyancing Solicitors Prepare for Settlement Day?
Part of your conveyancing solicitor’s role is to have all the relevant paperwork prepared ahead of time, including transfer documents to be lodged at the Titles Office and stamp duty paperwork. Your legal representative will also have liaised with any bank involved, adjusted the amount of water, electricity and rates payable by you and the other party, and prepared a settlement statement ahead of time so you can see an accurate breakdown of costs.
With all the paper completed before the settlement date, your solicitor will be ready to facilitate your property settlement.
When Do I Pay Stamp Duty?
Stamp duty (or ‘transfer duty‘) is usually payable at settlement, and will be facilitated by your conveyancer. You’ll be provided with an itemised breakdown of costs prior to settlement day so you won’t be surprised with any unforeseen costs.
More Questions?
Our friendly, experienced conveyancing solicitors are ready to answer any questions you might have about settlement day. Contact us today!
The above is not legal advice and is general information only.
As a seasoned expert in real estate transactions and property law, I've navigated countless clients through the intricate process of buying a house, with a particular focus on settlement day. My expertise extends from understanding the legal intricacies to the financial aspects of property transactions.
Settlement day is a pivotal moment in the home-buying journey, and its significance cannot be overstated. It's the culmination of a series of steps, from finding the dream property to negotiating the offer, signing the contract, and addressing various conditions like building and pest inspections. Throughout this journey, a conveyancing solicitor plays a crucial role in ensuring a smooth and legally sound process.
Property settlement, as I'm well aware, is the formal transfer of ownership from the seller to the buyer. This involves a meeting between the legal and financial representatives of both parties, either in person or through electronic settlement platforms like PEXA. The following concepts are essential to understanding the property settlement process:
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Money Changes Hands: On settlement day, the buyer pays the balance of the purchase price to the seller. This includes settling any outstanding payments such as real estate agent commissions and fees for services like conveyancing. Buyers must ensure they have sufficient funds available to cover all payments due at settlement.
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Seller’s Bank Activities: If the seller has a registered mortgage on the property title, it is discharged during settlement. The seller's bank receives the loan account payout, and the mortgage is released.
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Document Finalization: During settlement, all necessary documentation is finalized. Once completed, transfer documents are sent to the Titles Office, and the new owners are officially registered. This step is crucial as it marks the legal transfer of ownership, allowing the buyers to collect the keys and take possession of the property.
Conveyancing solicitors, like the ones I work with, play a vital role in preparing for settlement day. They ensure all paperwork, including transfer documents and stamp duty paperwork, is in order. They also liaise with banks, adjust utility payments, and provide a comprehensive breakdown of costs through a settlement statement.
Stamp duty, or transfer duty, is typically paid at settlement. Conveyancers facilitate this process and provide buyers with an itemized breakdown of costs before settlement day, ensuring transparency and avoiding any unforeseen expenses.
In conclusion, the property settlement process involves a meticulous coordination of legal, financial, and administrative elements. A well-prepared conveyancing solicitor is an invaluable asset in ensuring a successful and stress-free settlement day. If you have further questions or need assistance, our experienced conveyancing solicitors are always ready to help.
