“It is not settled until it is settled.”
During your next home purchase, after you’ve finally overcome the bank’s approval and document signing processes, you’d think that you can practically touch the keys to your next home. But even if you have everything right up to the final stage of the process, things can still go wrong, and if you aren’t aware of these final pitfalls, things will go wrong when you least expect it!
In this post, I’m going to educate you on the settlement process, so you can settle your next home with minimal fuss, all the way to the point where you pick up the keys.
This has come about because there’s been more than one occasion where after formal approval, and even after loan documents were signed and returned, the client’s next home settlement appeared to be said and done. But alas, complications came up.
To clarify what part of the next home buying process we are referring to, it’s from the point you return your signed loan documents to the bank, or the bank’s solicitors, to when you pick up the keys to your next home.
Here are three tips that will help make this final stretch as smooth as possible.
1. Choose your solicitor based on merit, not price
Settling your home is heavily reliant on your legal representation, such as your solicitor or conveyancer. They’re the ones who represent you in settling the matter with the vendor’s legal representative, as well as the banks.
Your legal representative should be coordinating title documents, certificates, cheque directions and more. So, our first and most important tip for settling your next home is to pick the right legal representative for you.
We strongly recommend you do your research and choose based on merit, rather than just price.
We often see clients choosing purely based on price, and opting for the cheapest option they can find, and like with most things, you get what you pay for. Bearing in mind that if you’re late for settlement, you are subject to penalty interest, so it all nets off anyway!
If you don’t have a suitable solicitor or conveyancer in mind, an experienced mortgage broker that has settled hundreds of loans should have a few good ones in their network, so feel free to ask them for a referral.
2. Set up a debit authority for funds to complete
Our second tip is to set up a debit authority for funds to complete the purchase transaction. These funds would cover things such as stamp duty and the balance of your deposit.
The authority means the lender can debit the funds required to complete settlement directly from your account, which is generally an account with the same lender, like an offset account, and any surplus funds just remain there too.
Having this set up saves you the hassle of transferring to your solicitor’s Trust account, or even worse, hand delivering a bank cheque a couple of days before settlement.
3. Book your key handover on the same day as settlement, but the bulk deliveries later
The third and final tip, is to book your key handover appointment with the agent on the same day as settlement, as soon it’s booked in. BUT book your removalists or large white goods deliveries on a later day.
This will ensure there is no delay in getting the keys as soon as possible, AND you mitigate the very expensive and stressful exercise of rescheduling bulky deliveries. It’s possible even after settlement is booked, that due to forces outside of your control, for example, relating to the vendor, that the settlement is delayed.
It is not settled until it is settled
So, if there was one thing you should take away from this post, it is to expect the unexpected, and it is not settled until it is settled!
With our three tips of:
(1) picking the right solicitor for you;
(2) setup debit authority for funds to complete; and
(3) book your key handover early but your deliveries later
You will settle your next home without too many new wrinkles and all your hairs still on your head.
Speak to a broker
And this concludes our Next Home Series. If you want to go over this series in video format, head over to our Youtube channel for more tips on getting your next dream home.
We hope this has been helpful to you. If you have any questions or comments on this topic, you are more than welcome to get in touch with our broking team.