Preparing for Settlement Day

By Fornaro | 19 May 2021

You’ve found your dream property, had your offer accepted, finance approved, and now there’s just one last yet very important milestone to achieve – settlement day. The anticipation has been building for weeks! Are you ready for the big day?

Settlement day can be both exciting and stressful. As your mortgage broker, Fornaro is here to assist you make everything go as smoothly and according to plan as possible. In this article, we will provide an overview of what to expect and some tips to prepare for a successful property settlement.

What is settlement day?

Settlement day is the day ownership of a property is legally transferred from one party to another. Simply put, it’s the day you get the keys to your new home. While your lawyer takes care of the legal requirements and works with Fornaro regarding your financing, you must also follow all sorts of regulations and procedures that they will explain to you, including those required by the lender and building insurance provider. The actual date of settlement day will be outlined in the sales contract.

What actually happens on settlement day?

When settlement day arrives, make sure you have done the following:

• Completed a final inspection of the property
• Organised building insurance, which should be done as soon as the seller signs the contract as the property is at the buyer’s risk from contract date (your lawyer will explain this obligation to you)
• Worked with your lawyer to complete and submit all the necessary documentation to transfer the property title to your name
• Completed all financing requirements and your lender is ready for settlement. Typically Fornaro will manage this process on your behalf, however you may be required to complete certain elements depending on your individual lender’s policies or process

On the big day, your home loan provider and lawyer will arrange the following with the seller’s representatives:

• The balance of the purchase price, along with any government fees and duties, are paid
• All necessary legal documents, including the mortgage, are completed and lodged with the respective agencies
• The certificate of title is transferred to your name and the property is legally transferred to you.

Once the paperwork is completed successfully, the settlement is final. Congratulations! You can finally get the keys and are officially the new owner.

Preparation Tips

1) Engage with Fornaro early

Seek professional advice from experts who understand the process be on your ‘property’ team. Talk to Fornaro, even before you start looking for a property as we can assist with organising pre-approval for a home loan. We will be here with you every step of the way from property search to loan application, settlement day and beyond.

2) Find a Lawyer

A property lawyer / conveyancer will assist you understand your responsibilities and rights in terms of the property purchase and settlement process. They also oversee the legal requirements and paperwork involved in a property purchase. They ensure the title is correctly transferred, or conveyed, from the seller to you. If you need a recommendation to a property lawyer please speak to Fornaro.

3) Negotiate a date that works for you

Remember that you may be able to negotiate the settlement period with the seller before signing the contract. Usually, at auctions, the settlement period is in the contract, but you may still be able to coordinate with the seller’s agent to see if their party would be open to a different date. This could be useful if you’re moving from one home to another and need to plan the timeframe.

The settlement period begins on the contract signing day and is usually between 30 and 90 days. In the current market we recommend a minimum of 45 days. This will give you enough time for your finance approval, complete the paperwork and make the necessary preparations. It can take time for your lender to approve your loan and issue the paperwork, and in the current market Fornaro recommend a 21 day finance clause.

4) Be vigilant about the paperwork

It’s Fornaro’s responsibility to submit your loan application and to manage your finance approval process. We work closely with the lawyer/conveyancer to make sure that all steps necessary are completed. Your responsibility is to provide and complete all the required details on the paperwork and return them within the relevant timeframes to minimise delayed loan approval and issues with the settlement. Paying attention to detail is crucial. Remember that you can always ask Fornaro for conveyancer and lawyer referrals for legal advice on understanding the process and the paperwork involved.

5) The result is worth it

As settlement day approaches and you feel excited, it’s also normal to feel nervous at the same time. Try not to stress too much and enjoy the process. If you have a team of professionals on your side, including Fornaro, things are likely to go to plan, or if a hiccup arises (which does happen), be managed efficiently. Fornaro are on your team, from property search and loan pre-approval up to the settlement day and beyond.

Additional Source:
https://www.realestate.com.au/advice/what-happens-on-settlement-day/