Buying or selling a home is an epic journey! Whether you’re searching for the right home for your family, an investment property or your very first home, it can be a bit of a rollercoaster. However, with the right team on your side, the experience can be exciting and stress-free.
Once you’ve found a buyer or your dream home to purchase, the next step is entering into an Offer and Acceptance Contract for Sale of Land. Also called an O&A or simply ‘the Contract’, this is the document that outlines all of the terms, conditions, dates and inclusions/exclusions relating to the property settlement. Your Settlement Agent (also known as a conveyancer), is the party that represents you during the settlement. They can also review the Contract before you sign it to ensure that it aligns with your unique requirements.
We recommend that you find the right settlement agent before entering into the Contract, as your real estate agent will ask for your preferred choice of settlement agent.
Some real estate agents have a financial interest in a settlement agent and will recommend you utilise their services. This may or may not be in your best interest. As an independent settlement agent…we guarantee to act in your best interests!
It is the role of the conveyancer to prepare the necessary legal documentation to ensure a smooth transition from sale to settlement.
In a settlement transaction, both the buyers and sellers require the services of a settlement agent or conveyancer. They are engaged to help with the sale process and to assist you in ensuring you understand the ins and outs of all necessary documentation.
What does conveyancing mean?
Conveyancing is the process of transferring ownership of legal title of land (property) from one person or entity to another.
A typical conveyancing transaction consists of three stages:
- The conditional stage – once the contract is signed
- The unconditional stage – once all the conditions of the contract have been met
- The settlement stage – officially transferring ownership to the buyer
What Is a Conveyancer?
A property conveyancer is a licensed and qualified professional, engaged by sellers and buyers to provide advice and information about the sale/purchase of a property, prepare the documentation required and facilitate the transfer of ownership and exchange of funds.
The most common reasons you would engage a conveyancer is when you are:
- Selling or buying a property
- Subdividing land
- Updating a Certificate of Title (i.e. due to change of name)
- Registering, changing or removing an easement
What happens during settlement?
A property settlement is an exciting time – for buyers, it’s a new home or investment, and for sellers, settlement is the start of a new, fresh chapter in their lives! But what actually happens during a settlement?
Well, the specifics all depend on what’s written in your contract, but for the most part, settlements follow the same cadence or rhythm.
Conditional Stage
In this first stage, the buyer’s offer is accepted by the seller, and everyone signs the Contract of Sale to formalise the offer. The amount and timeframe for payment is specified for the buyer to pay their deposit.
At this stage, your conveyancer will also be in touch to introduce themselves and will have some initial paperwork for you to sign to get the ball rolling on the settlement process.
Now is also when the parties (usually the buyer) work towards getting the conditions of the offer satisfied – things like applying for finance approval, organising inspections such as building and pest inspections, or selling another property (in the case of subject sale offers).
Unconditional Stage
Once all the key conditions have been met, such as finance approval or the sale of another property, the contract is considered to be in its ‘Unconditional’ stage. This is the time you need to contact your bank and arrange to sign any paperwork required by them.
If you’re selling and have a mortgage on the property (even if no money is owing), you’ll need to sign the Discharge of Mortgage paperwork. It’s important to do this as soon as possible, as depending on the structure of your home loan, it could take upwards of two weeks for the bank to be ready.
If you’re buying and obtaining a bank loan to cover some or all the purchase costs, you’ll need to sign your lender’s mortgage documents. You should ensure that this is signed and returned to them as soon as possible, as once they receive it back, they can take 1-2 weeks to be ready for settlement.
During the unconditional stage, all buyers and sellers will also need to complete their Verification of Identity (VOI) check, and sellers will have to provide a Clearance Certificate from the ATO.
Pre-Settlement
In the week prior to settlement, the buyer may be entitled to a final inspection of the property. This is arranged with the Real Estate Agent (or seller, if a private sale) and is an opportunity for the buyer to check whether any inclusions are working as expected.
Your conveyancer will also check in to let you know how things are progressing, and will finalise the financial breakdown of the settlement, including requesting any additional funds needed from you. Take care when transferring funds and verify the account details via telephone immediately prior to transferring.
Settled Stage
Congratulations!! Your conveyancer will let you know once settlement has taken place. For sellers, any balance of funds due to them will be deposited into their nominated bank account. Generally, cleared funds will be available on the day of settlement, however, in certain circumstances, it can take a little longer.
The key handover is arranged with the real estate agent. If the seller lives in the property, they have until 12 noon the day after settlement to vacate and hand the keys over. If the property is vacant, the buyer may collect the keys from the real estate agent once settlement has been effected.
A Typical Purchase Settlement Process
1. Signed Offer & Acceptance
Once you’ve made your offer and the seller accepts, the fully signed Offer & Acceptance Contract will be forwarded to the buyer’s and seller’s conveyancers.
2. Deposit
Ensure the deposit specified in your Contract is paid to the Real Estate Agent by the due date. Take care when transferring funds and ensure you verbally confirm the account details with their office prior to making the payment.
3. Appointment to Act
As your conveyancer, Strategic Property Conveyancing will then prepare the Appointment to Act for signing by you, along with some additional preliminary documents.
4. Finance Approval
Please keep us informed on the progress of your finance application. Once your finance has been approved, arrange a copy to be emailed to our office, as well as to the Real Estate Agent’s office by the due date. If you require additional time for your approval, please contact our office to discuss.
5. Special Conditions
Ensure that any conditions of the Contract which are your responsibility, such as a Building and/or Timber Pest Inspection have been satisfied within the specific time frame. We will keep you updated as to the progress of other conditions which are not your responsibility.
6. Signing Mortgage Documents
Once your finance is approved, the lender will send mortgage documents to you for you to sign and return.
7. Verification of Identity
As part of your settlement, you will need to complete an ID check. This can either be completed by appointment in our office, or electronically at your preferred time, via our ID partner, Scantek.
8. Insurance
Most lenders will require you to take out building insurance on the property. Please check with your lender and if required, provide a copy to them prior to settlement being arranged.
9. Final Inspection
Depending on the terms of your contract, you may be entitled to a final inspection of the property within the week prior to settlement. This is arranged with the Real Estate Agent (or seller, if it is a private sale) and is an opportunity for you to check any inclusions are working as expected.
10. Arranging Settlement
Strategic Property Conveyancing will coordinate a time for settlement with your financial institution and the seller’s conveyancer. If you are contributing funds at settlement, these will be requested from you. Take care when transferring funds and ensure you verbally confirm the account details with our office prior to transferring them.
11. Settlement Effected
Hooray! We will represent you at settlement and will arrange for the title to be transferred into your name. We’ll notify you and the Real Estate Agent immediately with the good news once settlement has been effected.
12. Key Handover
The keys can be collected by 12 noon the day after settlement (if the seller was living in the property at the time of settlement). If the property is vacant, the keys can be collected immediately following settlement. The Real Estate Agent will handle the key handover arrangements.
A Typical Sale Settlement Process
1. Signed Offer & Acceptance
Once you’ve found a buyer, the Offer & Acceptance Contract is completed with your Real Estate Agent or privately with the purchaser and signed by all parties. The signed Contract is forwarded to the buyer’s and seller’s conveyancers.
2. Appointment to Act
As your conveyancer, Strategic Property Conveyancing will then prepare the Appointment to Act for signing by you, along with some additional preliminary documents.
3. Discharge of Mortgage
If you have a mortgage on your property, you should contact your lender & arrange to complete a Discharge of Mortgage Authority. Ensure you forward a copy of the completed document to Strategic Property Conveyancing as this will assist us in coordinating your settlement.
4. Conditions of the Contract
Ensure that any conditions of the Contract which are your responsibility have been satisfied within the specific time frame. We will keep you updated as to the progress of other conditions which are not your responsibility (such as the buyer’s finance approval).
5. Verification of Identity
As part of your settlement, you will need to complete an ID check. This can either be completed by appointment in our office, or electronically at your preferred time, via our ID partner, Scantek.
6. Final Inspection
Depending on the terms of your contract, the buyer may be entitled to a final inspection. This is an opportunity for them to check any inclusions are working as expected, so you should ensure that all items are in working order prior to this inspection.
7. Settlement Effected
Hooray!! We will represent you at settlement and will arrange to pay any outstanding debt on the mortgage. The balance of funds will be deposited into your nominated bank account on settlement day. Generally, cleared funds will be available on the day of settlement, however, in certain circumstances, it can take a little longer.
8. Key Handover
If you reside in the property you have till 12 noon the day after settlement to vacate and hand the keys over. If the property is vacant, the purchaser may collect the keys from the Real Estate Agent once settlement has been effected.
