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Settlement is the final stage in the sale of a home when the representatives of the seller and buyer meet to finalise the deal. This generally occurs within 4-6 weeks of signing the contract. This gives both parties enough time to organise financing, paperwork, moving and other details that need ironing out. Keep in mind that the buyer may request a pre-settlement inspection within seven days of settlement. Make sure your home looks as good as or even better than it did upon first inspection. The settlement stage is the conclusion of the sale. The balance of purchase is given to the seller in exchange for the property title and keys. Here’s a guide as to what to expect during the settlement process.
RELEASING OF DEPOSITS
During the release of deposits, the lender authorises payment of the loan money for the buyer. The seller is then authorised to collect the deposit that has been held in trust by the buyer’s agent. The balance of the purchase price is paid to the vendor (the seller). The balance paid to the vendor is the money that remains after the current loan on the home is paid off (if applicable), and all other fees for the agent, bank and solicitor are deducted.
ORGANISE INSURANCE / RATES
The buyer of the home must organise homeowner’s insurance before the transaction is completed. Home insurance protects the investment for both the buyer and the lender. The buyer will typically compare rates from several different companies in order to find the best price for the coverage that suits their needs.
EXCHANGING OF TITLE, DEEDS AND KEYS
Once the financial end of things is taken care of, the buyer receives the title of the property. If applicable, the seller’s bank or solicitor will register the transfer of the home loan. If the seller has an agent, both the buyer and the seller must notify the agent in writing that settlement has occurred so the keys can be transferred to the buyer. The mortgage is noted on the title until all payments have been made. Once the property is paid in full, the lender’s information is removed from the title, and it will belong solely to the purchaser.
PAYING YOUR STAMP DUTY
The stamp duty is a government tax on the value of the property when it is sold. This must be paid at or before settlement by the borrower. The lender attends the stamping on behalf of the borrower. If, however, the occupant intends to occupy the home as the sole place of residence, the mortgage is exempt from the stamp duty. For those that are not exempt to the stamp duty, the fees are 0 plus $0.15 for every 00 if the mortgage is greater than $6,000.
Settlement is an important part of the home selling or home buying process. Listing your property, showing around potential buyer and even receiving an offer can all come to nothing if settlement does not go well.
