Property settlement is the final hurdle that buyers and homeowners have to cross before a transaction is considered to be complete. Considering that all of the preparation from the previous stages has led to the settlement, the settlement stage of a property transaction can be a stressful period for all parties involved.
Preparation is the key to ensuring a smooth property settlement process. If you’ve just purchased a property in NSW and have engaged the services of a conveyancer, they will typically give you a brief rundown on what will happen as part of the property settlement process in NSW — but it will be helpful for you to know what to expect, regardless.
What is property settlement?
Property settlement is the last stage of a property sale in which the terms of the sale are agreed upon and finalised by both buying and selling parties, payment is made, and the transfer of the property ownership commences. When the settlement is successfully completed, the transaction is considered closed.
How long does property settlement take in NSW?
The property settlement process in NSW will usually take about 1-3 months after sale contracts have been exchanged and signed by the buying and selling parties, assuming no other changes to the contracts are requested.
Before the settlement can proceed, both sides will need to have the necessary funds for the legal expenses and the payment of the house on hand. If necessary, conveyancers can negotiate for an extension of the settlement period to give their represented party more time to gather their funds.
What is the process for settling a property in NSW?
The settlement process for a property in NSW is relatively straightforward. The bulk of the required actions are usually handled by a conveyancer or property lawyer to ensure a smooth transaction without any errors or mistakes.
Settlement date is agreed upon
The date of settlement is stated in the contracts that are exchanged between parties. Upon signing of the contracts, this date will mark the time when the buyer is to pay the seller the agreed-upon price of the property, and for the seller to initiate the transfer of property ownership to the buyer. This date will usually be set 42 days after the exchange of contracts.
Preparation for settlement
With the settlement date fixed, both parties will make preparations for the settlement by gathering the necessary funds and documents as stated in the contracts. At this stage, conveyancers and property lawyers are often instrumental in handling the checks and information needed for the eventual settlement day.
Final inspection before payment
In the period leading up to the settlement date, the buyer will be given the opportunity to inspect the property to ensure that its condition is still the same as stated in the contract. If any prior arrangements have not been completed or have been changed by the seller, the buyer has the right to ask the seller to take action and rectify the issue. This can include repairs to newly-damaged areas or the replacement of certain inclusions.
Ownership is transferred to buyer
On the settlement date, the seller will receive the stated amount of payment for the property, and the buyer will receive the ownership rights to the property. Payments will also be made to the conveyancers, who will manage the legal transfer of the property.
Any existing mortgage that the seller has on the property will be released before the transfer of ownership. The buyer’s lender will then process the settlement amount from their loan account, after which the property will be legally transferred into the buyer’s name.
Important tips for buyers
When it comes to buying a house, property settlement is one of the last few opportunities for buyers to make sure that they are getting what they are paying for. Here are some tips to guide buyers during the property settlement process in NSW.
1. Learn what to look out for during the final inspection
The final inspection is the last chance for you to spot any discrepancies in what the seller has provided about the property’s condition. The best way to do this is to create a checklist of all the items listed in the contract and tick them off one by one to ensure that you don’t miss anything out. Apart from inclusions, you should also look out for signs of damage, such as holes in the wall. Older homes are especially prone to wear and tear, and their condition can change from the time you first inspected the property.
2. Consider building and contents insurance
Lenders will typically advise buyers to take out building and contents insurance on the property to protect your interest in the property and protect it from unexpected accidents like theft, or a fire.
3. Organise outgoing payments
As the current owner of the property, the seller is responsible for the outgoing rates up to and including the day of settlement. As the new owner past the settlement date, you will be responsible for the costs.
A conveyancer can help you work out the required amounts into a settlement adjustment statement that will outline these costs, as well as other expenses such as stamp duty, which must be paid before you can receive the title to your new home.
Even with the information we’ve provided above, there are many other detailed aspects of the NSW property settlement process that will need the expertise of an experienced conveyancer. At Entry Conveyancing, our team of the best conveyancers in Sydney and greater NSW can help to provide you with comprehensive support to ensure that everything you need is covered before and during the property settlement process.
