So much time and energy go into the first part of buying your home - the research, the inspections, the negotiations and loan qualifications, all these are essentials of buying a home everyone knows about, talks about and swaps stories on. You also will probably receive a lot of advice and even help from friends and family who are sure to tell you to check the plumbing and the roof condition or do a few inspections of their own.
Once everything has been checked and doubled checked, prices have been agreed on and you are ready to proceed, only...a lot of home buyers are stumped about what is supposed to happen next. The actual paperwork, legal matters and financial details suddenly get hazy, this part isn't showcased on TV adverts or shown in movies, it's also not something you chat about around the dinner table. But once you have secured your property, either through a private sale or an auction, a lot still needs to happen, and every bit is as important.
Between your agreement to buy a property and the settlement period ending (a typical settlement period falls anywhere between one and three months), your financial loan agreements will be completed, your inspections will be carried out, paperwork will be signed, land tax will be paid, and then, when everything aligns perfectly, the money will change bank accounts and the title and keys will be passed over to you.
For many new homeowners asking questions about the next steps might have come too late.
To help get your head around it all and prepare before the settlement clock ticks down, we've put together this list as a handy guide to what you can expect so you don't get caught out. As always this is general information to help understand the big picture if you need information that is particular to your situation be sure to seek out expert advice and recommendations that will be a perfect fit. To read about important questions you need to be ahead of before a sale see our previous posts.
Know your conveyancer
By the time you have agreed on the purchase of a property you will have had at least a few sessions with your conveyancer. Firstly to get to know them and their expertise to be sure they are skilled and ready to handle your property purchase, then for your quote and agreement of services, and most importantly for them to read over your property contract to be sure it meets all your requirements.
There is a scene in a national lampoon movie where the family finds their perfect home and are so excited to buy. The current property owners go on to add that they will be taking most of the home's interior with them, including the kitchen cabinet doors. It's brushed off as a joke, however, they meant it, leaving the family to arrive after a long and nightmarish trip to discover their new home stripped to the shell. Now admittedly that's a pretty wild example, however, it is also a fantastic illustration of how important having a conveyancer check over the terms of purchase to be sure you are getting everything you expect.
Conveyancers get to know their clients very well, there is a lot to discuss and a lot that needs to happen between you, so have the number saved on your phone and make sure you like them since you'll be chatting a lot.
Besides their end of the paperwork process, your conveyancer will also have online access to your whole application which means they will be able to let you know if there are any hold-ups with the bank approvals or with the signatures at the vendor's end.
"It's important you talk to your solicitor regularly to ensure the sale is on track, not only from your financier's point of view but from the outgoing party's point of view as well," Alistair says.
Make sure your money is ready
By this point your deposit will have been paid, unless you had previously negotiated a deposit bond. Now it's time to make sure the rest of your money will come through in time for the settlement completion date. This applies even if you have a pre-approved loan or conditional loan. Now is the time to inform the bank of your agreement to buy and give them all the property details together with a copy of the signed agreement. Using a valuer, they will undergo the necessary checks of the home to make sure your purchase matches the value of the loan. Once the bank or lender is ready to go ahead your loan will become unconditional.
The bank will most likely have conducted background checks before this point but even if they have they might still require credit card spending information and proof of available bank funds. Don't make the mistake of assuming you can spend up after your conditional loan amount has been cleared, the bank will most likely do additional banking checks after your agreement to make sure you continue to keep your debts in check and nurture your savings.
To get a jump on this process and speed things up, especially if you have a short settlement period, ask your lender what their requirements are and have everything ready to submit as soon as the sale contract is signed. The faster this is approved the faster your settlement date can be locked in.
Insure your new property
As soon as you agree to buy, submit your insurance information to cover your new property from the moment the title changes to your name. Having a home and contents insurance policy in place ahead of time means that there will be no snags that may leave you without cover unexpectedly. Also, check to see if any moving accidents will be covered as well.
I would recommend getting any pest inspections and building checks done before you agree to buy. It's not something that you want to discover after the contract has been signed, although having said that, if you missed that step before, better late than never. Your bank wouldn't have approved your loan if there was anything seriously amiss with the property so at this point you won't be expecting any nasty surprises.
Just before your settlement date, arrange a walkthrough with the agent to make sure nothing has happened to the property since you purchased it. The property is not yours at this point so you will need to make a formal application for a walkthrough. You are looking to make sure the property is as you last saw it, so looking for vandalism that might have occurred if the house was vacant for a long period, weather damage if there have been storms, fire damage or anything taken or left behind you weren't expecting. If you find anything that's not as you expected, alert the agent and let your conveyancer know. Photo evidence can help your case as well. You want to make sure that any issues are repaired before you take ownership and financial responsibility at settlement end.
Adjustments may come up as your settlement progresses that can include minute or even large change to your costs that include council rates and land tax (stamp duty) or outstanding fees required from the existing owner. Everything will be tracked online and you will be alerted to changes as soon as they become apparent through your conveyancer.
Using the online PEXA system, your conveyancer can upload signatures and have your title instantly transferred when the money goes through. Pre-appointed settlement dates and times, down to the second, are inputted online meaning settlement can go ahead at any time of day or night, even on public holidays and weekends, it all depends on what you and the seller agrees to. Your conveyancer will confirm the payment and title completion on settlement day so that you can be ready to collect the keys and finally take possession of your new home.
Ready to get going? Reach out for an appointment with one of our expert conveyancing team members and get ahead of your home purchase today.