What Happens on Settlement Day?

Settlement-DayYou have purchased your new home and settlement day is rapidly arriving so what happens on Settlement Day?

There is one settlement day problem that is responsible for 95% of all problems on the day of settlement. It alone is responsible for  just about all the frustration and stress by buyers on settlement day. Before we tell you how to avoid this one major issue lets look at just what happens on settlement day.

Property settlement takes place at a prearranged settlement date. In Queensland the normal settlement is 30 days however it is not that unusual to have settlements be anywhere up to 90 days long.

Please note that other states have different settlement period, even up to a standard of 90 days.

This is typical of what happens on Settlement Day:

  • The lender authorises payment of the buyers loan money and payment is made to the vendor.
  • The Buyer or the Buyers solicitor authorise the vendor to collect the deposit money from the estate agent where it has been held in trust.
  • The Buyer and Seller pay adjustments or receive reimbursements such as taxes, council and water rates that were prepaid or accrued by the vendor.
  • The Buyer receives title of the property and your solicitor or bank will arrange for the Registrar General to register the transfer and the home loan. The mortgage will be noted on the title until the term of the home loan is completed.
  • Both Parties advise in writing to the agent that settlement has occurred and that the agent can release the keys to the Buyer. This can take up to a couple of hours after settlement has occurred before the correct notices have been received so it is always best to ring and check if the keys are ready to be released.

How to Avoid The Most Common Problem on Settlement Day

In all the excitement of moving into your new home prospective purchasers often make the fatal mistake of booking their removalist to deliver their furniture at the exact time of settlement.

It can often take hours before the correct notices are issued and agents are authorised to release the keys. In the meantime if your removalist is just sitting there it can cost you hundreds of dollars an hour as they wait.

It is not unusual for settlements on settlement day to be delayed by a few hours, or even a day or so. Often this results from a missed signature or incorrect paperwork by one of the solicitors or the banks involved. The important thing is to keep calm. Although it is an extremely frustrating and emotional time everybody will be working to effect settlement as soon as possible for you.

Our strongest recommendation is to allow at least several hours after the official nominated time for settlement and preferably a day before you plan to move your possessions in. If you have sold your own house and plan to move from one to the other on the same day we suggest you organise alternative accomodation for the night in case of delays.