What is settlement?
As a homebuyer, it can be overwhelming to go through the process of buying a house, especially when it comes time to settle and if you don’t have a mortgage broker or financial advisor either for guidance. This is the legal process of transferring the ownership of a property from the seller/registered owner to the buyer.
It involves several steps and can be confusing for those who are not familiar with the process.
In this comprehensive guide, we will take you through the process step-by-step, from what to expect, how to prepare for this process and what happens after its completion.
Settlement is the final stage of the legal process of purchasing a property. It is the process of transferring ownership of the property from the seller to the buyer.
This process involves several steps, including the possession of the property, payment of stamp duty, and the official transfer of land.
Possession of property
Possession of the property refers to the point at which the buyer takes ownership of the property. This can occur on the proposed settlement date, or it can be delayed if there are issues with the property that need to be resolved.
The buyer can take possession of the property once the sale contracts have been exchanged and the deposit has been paid.
Land transfer duty
Land transfer duty is a tax that is payable by the buyer when purchasing a property. The amount of land transfer duty payable depends on the purchase price of the property.
The buyer is responsible for paying this tax, and it is usually paid on or before settlement day.
Offical transfer of land
The official transfer of land is the process of transferring ownership of the property from the seller to the buyer.
This process is usually completed by a conveyancer or solicitor and involves the exchange of legal documents, including the land transfer document.
What is settlement day?
This is the day on which the buyer takes ownership of the property. It is the final stage of the legal process of purchasing a property.
On settlement day, the buyer pays the balance of the purchase price to the seller, and the seller hands over the keys to the property.
How to prepare for settlement
Preparing for this all-important day is a crucial part of the home buying process. It involves several steps, including gathering the necessary documents, paying rates and taxes, and conducting a final inspection of the property.
There are several documents that the buyer will need to provide before settlement can take place. These include a contract of sale, proof of land transfer duty payment, and identification documents.
The conveyancer or solicitor will provide a list of all the documents required before this date of transfer.
Rates and taxes
Before this transfer can occur, the buyer will need to pay any rates and taxes that are outstanding on the property. This can include council rates, water rates, and strata levies.
The conveyancer or solicitor will provide a list of all the rates and taxes that need to be paid before settlement.
What happens after settlement?
After settlement, the buyer takes ownership of the property, and the legal process is complete.
However, there are still several tasks that need to be completed, including updating the property’s ownership details with the relevant authorities, setting up utilities, and obtaining insurance.
In conclusion, the settlement process is an important part of the home buying process. It involves several steps, including the possession of the property, land transfer duty, and the official transfer of land.
By following the steps outlined in this guide, homebuyers can be confident that they are fully prepared for the settlement period and taking possession and can enjoy their new property without any stress or complications.
Tori is a finance blogger and researcher at OurTop10.com.au, where she enjoys helping people navigate the world of finance and money. Through her insightful articles and comprehensive research, she empowers readers with valuable knowledge on budgeting, saving, investing, and retirement planning.
Tori’s approachable and empathetic style makes complex financial concepts relatable and easier to understand, She aims to foster a sense of community and leave a lasting, positive impact on her audience’s financial well-being.