A property settlement is when you take legal and physical ownership of a property.
This is the last step in buying a property after making a successful offer, paying a deposit, signing and exchanging contracts of sales and then passing the cooling-off period.
As the purchaser, after passing the cooling-off period you’ll find yourself waiting for your legal representatives to complete actions on your behalf during what is called the settlement period.
A settlement period runs through to the actual date of the settlement. Depending on what state or territory you live in, this is usually between 4-6 weeks.
However, as part of the sale you may be able to negotiate a shorter or longer time with the vendor.
Things to do leading up to settlement
A pre-settlement inspection is an opportunity to do a final inspection of the property before taking possession.
If you find something that’s not satisfactory with the property’s condition or that the condition has changed since you exchanged sale contracts, check with your conveyancer or solicitor if you can delay settlement while the problem is fixed.
The pre-settlement inspection should be done before the day of settlement. You may want to arrange an inspection so that there is time to raise any concerns that arise.
It may also be helpful to put together a checklist of what you want to look for before the day.
Things to know on settlement day
Timing is everything. Keep in regular contact with your conveyancer or vendor’s real estate agent during the settlement period to make sure everyone is on track to ensure the property settles on the designated date.
Delaying settlement for whatever reason can cause personal and financial stress to both you and the vendor.
Typically, your conveyancer or legal representative will handle a number of items on your behalf and will be able to advise you on:
- The remaining balance of the sale price that needs to be paid to the vendor
- Relevant legal documents (such as the land transfer document) to be completed and lodged with the relevant agencies or offices
- Expenses related to owning the property (such as council rates and other charges) that are transferred to your name – the vendor is responsible for paying rates up to and including the date of settlement
Once settlement is complete you can collect the keys to the property along with the title deeds, making you its new registered owner.