UNDERSTANDING THE SETTLEMENT PROCESS
Most people buy or sell real estate at least once in their lifetime and the fact is it can be a very daunting experience.
Buying or selling a property creates a legal right and an obligation on both parties. These transactions can be a complex legal process, so with the right preparation and with a little understanding of how settlements work may alleviate any stress through the process.
Your settlement agent or solicitor will arrange the following on your behalf:
- ensure that all relevant parties have fulfilled and met their obligations on the Offer & Acceptance in the lead up to settlement;
- arrange for payment of transfer duty, if applicable, to the Office of State Revenue;
- that the property is free from any restrictions/encumbrances on the transfer of the title (or, the restrictions/encumbrances will be removed in time for a transfer of title to be registered);
- prepare and verify all necessary documents to enable settlement to occur;
- liaise with your mortgage broker, lender, and real estate agent (if applicable) to ensure your finance or discharge of mortgage is in order, your final inspection has occurred, and all parties are ready for settlement;
- adjust your rates and taxes. The seller is responsible for rates up to and including the day of settlement and the buyer is responsible from the day after the settlement or possession day;
- pay outstanding monies to local council, water and land tax authorities (and strata company if applicable), and transfer the accounts from the seller to the buyer;
- provide you with a settlement statement advising you, as buyer, of the funds required to complete settlement; or as the seller, funds due to you once settlement has been completed;
- coordinate settlement date and time with your bank and the other parties settlement agent or solicitor;
- attend settlement on your behalf and advise you once settlement has occurred;
- at settlement, the balance of the purchase price will be handed over to the seller’s settlement agent or solicitor and the buyer’s settlement agent or solicitor will ensure that documents are registered so that the title reflects a change of ownership; and
- confirm all documents are lodged with Landgate to ensure the transfer of the title to the buyer.
Delay in Settlement
Delays can be frustrating, particularly if you are moving and everything’s already been organised. These delays can be expensive with penalties applying in some cases, if you, or a party linked to your settlement is a cause of the delay.
The most common reason for a settlement delay is because documents weren’t signed properly or not returned on time to the bank or settlement agent or solicitor.
The best way to avoid any delays is to ensure that you:
- be proactive, and return your settlement documents, discharge of mortgage or loan documents as soon as possible,
- ensure you execute your documents correctly and in all the correct spots. If you are unsure, ask your settlement agent or solicitor for help with your documents and your broker/lender about your bank documents.
Take home message:
Be aware of what is required of you to ensure your settlement proceeds to settlement and on time. Any delays can be expensive and being proactive will alleviate any expense and stress on you through the settlement process.
Nominate WA Property Lawyers for all your settlement requirements