We have put together a 5 step guide for what happens after you’ve won at auction or your offer on a property has been accepted.
Once you have signed the contract of sale on your new property, you get the ball rolling for the settlement period which commonly lasts between one and three months.
Inspecting, financing, securing and signing seemingly endless reams of paperwork is now all that stands between you and your property purchase.
Step 1: Add your legal team to your speed dial
Your conveyancer or solicitor is a fundamental point of contact throughout the purchasing journey, so it’s best you have their phone number handy. It is important that you speak to your legal team frequently to ensure that the sale is proceeding without any issues, not only from your banks perspective, but also from the vendors perspective too.
Sometimes settlement deadlines can be delayed because there are issues with the lender organising the discharge of mortgage or there could be caveats lodged on the property’s title that will need to be removed before settlement can take place.
Step 2: Get your finances in order
You will probably have already paid your deposit – especially if you were the winning bidder at auction which will require a deposit on the day – but next you will need to ensure that your finances are ready for a bank to look over for approval.
Regardless of whether or not you had conditional or pre-approval prior to making your offer, you will still need to obtain unconditional approval and formally secure your funding. Your lender will need you to provide them with a signed copy of the contract of sale, after which point they can then proceed to instruct the valuer who will arrange to inspect the property and provide a formal valuation.
Typically, once the valuer is appointed, the bank is satisfied with your ability to service the loan.
To make this process as streamlined as possible, it’s recommended to have all your documents ready to send off. If you’re in doubt, speak to your mortgage broker who will help guide you through this process.
Once your mortgage has been given the green tick of approval and signed-off, you can then look forward to organising the final settlement date with the vendor.
Step 3: Get insurance
The responsibility of who needs to insure the property during the settlement period differs in each state. However, we recommend taking out your own insurance policy on the property as a protective measure, and do it as soon as your offer is unconditional.
Regardless is anything were to happen to the property, you may still be required to settle on the property.
Step 4: Pre-settlement inspections
Before the exciting settlement day arrives, you will need organise pest and building inspections. These inspections will alert you to anything untoward that you as the purchaser my not be aware of. Typically, hidden things like termite activity and structural issues will only be found through these inspections and they will allow you to either pull out of the contract, or renegotiate the contract terms (including the price).
You are also encouraged to perform a private pre-settlement inspection with the agent a few days prior to your settlement date. This allows you to inspect the property and ensure it is in the same, or relative similar, condition as to when you made your offer. Its highly recommended that you make sure the electricity is connected in your name so that during your inspection you can turn on all the lights and check all of the appliances are in good working order.
Step 5: Settlement day
Settlement day is typically agreed upon between the vendor and you. On the day you can either be as hands-on or hands-off as you would like as many of the responsibilities can be passed on to your legal team.
But before you do anything, there is the settlement adjustments that need to be made, which outline any changes to the settling costs, like council rates and stamp duty. The seller may also be required to pay any outstanding bills, which could be deducted from the sale price.
After this is all taken care of, you’re free to proceed with the final sale.
These days settlements are typically automated through the online PEXA settlement system. Once confirmation has gone through, your legal team will notify you and you can then arrange to pick up the keys from the agent. Then, at this point will have ownership of the property and the celebrations can begin.
Luke Jorgensen - Lush Property
Tags - Property Investment; Property Development; Renovation; Valuation; Valuer; First Home Buyer; Buyers Agent; Buyers Advocacy
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