From Contract to Settlement
Congratulations, you have purchased a new home! Now you can prepare for the big move. But besides packing, what else needs to be done between signing the contract and settlement?
Most contracts will specify that the purchaser is responsible for the property within this time, so you should immediately organise building insurance to cover the purchased property.
Other things to consider prior to settlement are:
- Contact your bank or financial institution to arrange the finance detailed in your contract
- Pay the deposit to the vendor's agent's Trust Account after the ‘cooling off' period has expired
- Choose a conveyancer – a professional who can complete all the legal paperwork for transacting the property. Refer to 'Role of the Conveyancer', located under 'Steps in the Buying Process'
- Approximately one week before settlement, you will receive a settlement statement from your conveyancer detailing the purchase price, deposit paid, rates and tax adjustments. By the last working day before settlement, you ensure you have paid the amount detailed on your settlement statement so that settlement is not delayed
- If not arranged prior, within this last week, arrange for gas, electricity and telephone utilities to be activated for your newly purchased property. At the same time you can also request final readings for the premises that you are vacating
- If required, arrange removalists
In general, settlement periods are between 4-6 weeks however it is not uncommon for either party to request a variation to this period of time.
The settlement period forms an important part of the contract of sale and needs to be mutually agreed by both parties. When setting a settlement date, both parties to the contract should be confident that they can comfortably meet the agreed date and important issues to consider are arranging finance, organising a conveyancer to complete the transaction and the practicalities of moving house.
Often vendors and purchasers seek longer settlements as they balance the sale of one property with the purchase of another. If both parties are in agreement, there should be no issues with a lengthy settlement period. On occasions a shorter settlement period is requested but, you need to be aware that a considerable amount of work needs to be undertaken prior to the financial transaction taking place. It is therefore advisable to discuss the shorter timeframe with your real estate representative to ensure sufficient time is allowed for the conveyancing process.
Changes to a settlement date after the contract has been signed can only take place by mutual agreement of both the vendor and purchaser. If you require a change to the settlement date, give as much notice as possible, but be aware that the other party is under no obligation to vary the original date.
Your conveyancer will attend settlement on your behalf and notify you once settlement has taken place, following which, you will receive the keys to your new property.
To assist consumers with real estate queries, REISA operates a free information service – REISA Query Connect on free call 1800 804 365, between the hours of 9.00am to 4.00pm each weekday. This service is staffed by knowledgeable real estate professionals with many years of practical experience.