What is Property Settlement?
Property settlement is a legal process undertaken by financial representatives of the buyer, with those of the seller. It is when ownership changes, and the balance of the sale price is finalised.
When an offer is made on a property, the seller sets the settlement date in the contract of sale, which is typically between 30 and 90 days. During this period or prior to, the lender or the real estate agent would recommend arranging a settlement agent to handle the preparation of documentation to settle the purchase process.
Settlement is the all-important final stage in the sale of a property, requiring the conditions of the Contract for Sale of Land (or Strata Title) by Offer and Acceptance to be satisfied and done so in a timely manner. The conditions might include inspections such as building and pest, ensuring both parties are offered complete transparency.
The settlement process can be complex and it is advisable to use a qualified professional to guide you through the process to the completion of the settlement.
What Does a Settlement Agent Do in Perth?
A settlement agent in Perth, such as Strategic Settlements, plays a critical role in the property transaction process. They are responsible for coordinating all the legal and administrative aspects of property transactions, including preparing and lodging necessary documents, conducting necessary searches, liaising with all parties involved, and ensuring that all conditions of the contract are met.
From a Buyer’s Perspective
Your settlement agent will:
- Ensure the details in the Offer and Acceptance are accurate and reasonable
- Provide updates on settlement progress and advise you of any potential delays
- Liaise with involved parties to ensure the Offer and Acceptance clauses are met
- Liaise with your lender and seller’s agent to coordinate the settlement transfer date
- Ensure there are no encumbrances or outstanding orders on the property
- Prepare the correct documentation you are required to sign
- Ensure stamp duty (if applicable) is paid in the correct timeframe
- Ensure rates are paid up to the time of settlement
- Attend settlement to ensure correct exchange of legal documents and funds
- Complete official Transfer of Title documentation
From a Seller’s Perspective
Your settlement agent will:
- Ensure the Offer and Acceptance refers to the correct property
- Provide updates and advise you of any potential delays or requirements
- Ensure you complete all conditions of the contract on time
- Liaise with your lender ensuring any mortgages over the property are to be removed upon settlement
- Liaise with the buyer’s agent to ensure their finances are in order
- Prepare the correct documentation you are required to sign
- Ensure rates are paid up to the time of settlement
- Attend settlement to ensure correct exchange of legal documents and funds
Do You Need a Settlement Agent?
Well, a settlement agent is a licensed and qualified agent who, along with coordinating involved parties, also handles the necessary searches to ensure all debts are removed and parties are made aware of all important information about the property being purchased.
Your settlement agent is the ‘party planner’. They liaise with your bank, broker, real estate agent, builder (if applicable), and building and pest inspectors to ensure that everyone is on the same page and have what they need to satisfy the conditions of your contract to get you into your new house.
Ultimately, their role is to assist in the process of the transfer of ownership of property from a seller to a buyer. Lawyers and settlement agents have the necessary qualifications and licenses to ensure that all legal requirements for the transfer of the title to the property are complied with for the title to be registered in the name of the new owner.
A property settlement agent ensures all the conditions of the sale of property contract are fulfilled. Settlement agents are required to hold a current licence and a triennial certificate under the Settlement Agents Act 1981 (the Act). They must have professional indemnity insurance, maintain an annually audited trust account and participate in the Compulsory Professional Development Program each year.
What to Expect from a Settlement
Costs
Settlement costs lie with the buyer; however, if the relevant inspections show up aspects that require repair, it can result in a reduced sale amount, costing the seller. Settlement fees are not regulated within the industry, so it is always worth considering the recommendations that are forthcoming from your lender as well as doing your own search.
In terms of the property transitioning from one owner to the next, the seller is responsible for rates and council fees up to and including the day of settlement, after which the ownership and these costs are passed on.
Time
When an offer is made on a property, the seller sets the settlement date in the contract of sale, which is typically between 30 and 90 days. This period provides both the seller and the buyer enough time to prepare the relevant paperwork, financing, moving, cleaning and other aspects required to be arranged before final settlement.
Once a settlement is finalised, the transfer of ownership is complete.
Settlement Process Timeline
There’s a lot to consider when buying a property, be it your first home or investment property. The following timeline outlines the key stages to provide perspective on settlement timing. A settlement agent will coordinate all aspects of the settlement and keep you informed of inspection outcomes and relevant timings as they occur.
Making an offer
It is at this stage that your lender will recommend using a local settlement agent to get things moving. Generally, you will make an offer that is ‘subject to finance’, which will include property inspections with specific timings, including a date for settlement. As mentioned earlier this is typically between 30 and 90 days. If the offer is accepted by the seller, the relevant property inspections proceed, as included in the contract. If the inspections return with faults, your settlement agent will advise on suitable actions.
The settlement inspection
Just before settlement, you’ll have the opportunity to do a final inspection of the property. The seller is obliged to hand over the property in the same condition as when it was sold. When viewing, a number of aspects should be checked including structure, fittings, appliances and that remote controls are supplied and working. If all is okay, the inspection document would be signed to proceed. If there is a problem, a settlement agent will raise action needing to be taken or a reduction in the price, with the seller.
Picking up your keys
When the day of settlement finally arrives, the keys land in your hand. The final deposit will come out of your bank account and mortgage repayments will commence, one month after the settlement date. From there, it’s either time to move in or time to get to work.
If you’re buying a new home, make sure all the work is finished and that the appliances are installed and working. A defects inspection via a building inspector can be arranged, if you don’t feel confident checking these things yourself.
Get a Free Perth Settlement Quote
If you are seeking a qualified and experienced Settlement Agent in Perth, backed by a renowned property team, contact Strategic Property Settlements today. For more information on the settlement process, check our knowledge centre for our latest articles.
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*Our quote is based on the information provided.
Please remember, in addition to our quote, as with all settlements, government fees such as stamp duty, registration fees, and other statutory charges will also apply to your property transaction. Your quote will include a detailed breakdown of these fees to ensure full transparency.