Settlement day is the finish line when you’re buying a home or investment property, so it’s important to know what happens on the day. Read on to find out everything you need to know as a buyer, including answers to FAQs.
What is settlement day?
Settlement day is the day that ownership of the property legally transfers from the seller to you. Three parties are involved in this process:
1) your lender.
2) your solicitor or conveyancer.
3) the seller’s solicitor.
Settlement day is usually between 30 and 90 days after you sign the contract to buy.
What does the lender do on settlement day?
The lender does two things:
1) transfers your loan amount to your conveyancer. Your loan amount will be the funds you need to buy the property after you have paid your deposit. It should also include the cost of any transfer duty or lenders’ mortgage insurance that you need to pay.
2) registers a mortgage in your name with the relevant government department (in New South Wales, it’s Land Registry Services).
What does a conveyancer do?
The conveyancer does four things on settlement day:
1) ensures that the loan funds are transferred to the seller’s solicitor for transfer to the seller.
2) registers the transfer of land with the relevant government department (Land Registry Services in New South Wales).
3) ensures that any other lender’s mortgage on the property is discharged.
4) ensures that all buyer and seller obligations in the sales contract are fulfilled.
What does a buyer need to do on settlement day?
The good news is that you don’t have to do much (or anything at all), provided everything has been organised before settlement day. That means you need to have fully briefed your conveyancer on the sale.
What does a buyer need to do before settlement day?
Before settlement day, you need to do seven things:
1) have your loan approved.
2) include a satisfactory building and pest inspection included as a contract clause.
3) hire a conveyancer or solicitor to look over your contract before you sign it
4) sign the contract.
5) arrange for the building and pest inspection to be done.
6) have your conveyancer or solicitor booked to act on your behalf on the day.
7) take out an appropriate level of home and contents insurance to begin from the settlement date.
How we can help
If you’re looking to buy a new home or investment property and you need finance, our licensed and experienced mortgage brokers at Wisebuy Investment Group can help. We can also help you with your loan application.
We service a diverse range of clients in the popular Newcastle, Lake Macquarie and Maitland areas. Our expert brokers work with more than 60 lenders in the Australian market.
Contact us today for an obligation-free chat to find out more. We’d be happy to answer any questions you have.