After celebrating success at auction or negotiating a private sale, the next milestone in your property-buying journey is settlement. Here’s what you need to know.
1. Understand settlement
Property settlement is an official process usually conducted between your legal and financial representatives and those of the seller. It’s when ownership passes from the seller to you, and you pay the balance of the sale price.
The seller sets the settlement date in the contract of sale and the property settlement period is usually 30 to 90 days. It’s when ownership passes from the seller to you, and you pay the balance of the price.
2. Arrange your final inspection
You’re entitled to inspect the property at any reasonable time during the week before settlement. Contact the agent to arrange this inspection. The seller must hand over the property in the same condition as when it was sold. Check all the items listed in the contract are there and in the right condition.
3. Organise insurance
Your lender will usually recommend you take out building and contents insurance effective from the date the seller signs the contract. This is to safeguard their interest in the property, as well as your own.
4. Check measurements
Your legal practitioner or conveyancer will send you a plan of the land so you can check all measurements and boundaries correspond with the Certificate of Title. You should confirm if so, or alert them to any discrepancies. Make sure you provide documents and other information promptly when requested, as delays can be costly.
5. Understand outgoings
At settlement, all outgoings such as rates and other charges are adjusted between you and the seller. The seller is responsible for rates up to and including the day of settlement. You are responsible from the day after settlement.
You are also responsible for paying land transfer duty (formerly known as stamp duty in Victoria) on the sale. It is usually paid at settlement but you have up to three months after settlement to pay. You cannot receive title to a property until you have paid the duty.
6. Collect the keys
Once settlement is completed, you can collect the keys from the agent and take possession of the property.