When and where does settlement take place?
Your settlement date is determined by the settlement period listed on the contract of sale and the date of exchange of the contract. It is typical that settlement occurs six weeks after the date of exchange however it is possible to reduce or extend the settlement period.
Settlement takes place through an online platform called PEXA at a time set by the vendor. Your solicitor/conveyancer will let you know the settlement time a few weeks in advance. Settlement usually takes 20 to 30 minutes to complete and you will be notified when it has been finalised.
Fees payable by you on settlement
A settlement statement will be provided to you prior to settlement showing the fees payable by you on settlement. Those fees are as follows:
- Balance of the Purchase Price – You will need to pay the purchase price less the deposit you have already paid to the agent.
- Outgoings – These are the expenses of the property which are council rates, water rates and if applicable strata levies and land tax. You will be paying your proportion from the settlement date up to the end of the relevant rating quarter or year. The Vendor will either have paid all arrears up to date or will pay them on settlement from their sale proceeds.
- Stamp duty – Unless you have already paid stamp duty, stamp duty will also need to be paid on settlement.
- Legal/Conveyancing fees – The balance of fees to your solicitor/conveyancer will be paid on settlement. This fee will have been discussed with you at the beginning of the matter and the terms finalised by way of a Cost Agreement.
- Registration fees – On settlement there are three common documents which are required to be registered at Land Registry Services. Each document registered incurs a small fee. These are a Transfer (which transfers the property into your name), a Mortgage (if you are obtaining finance) and a Discharge of Mortgage (if the vendor has a bank to discharge). Keep in mind that the Discharge of Mortgage fee is paid by the vendor by way of a deduction from the total purchase price on settlement.
- Settlement fee – This is a small fee payable to PEXA which is the platform for online conveyancing via which your property will settle.
Providing shortfall funds
Your lender will provide the total amount of loan funds available a few weeks prior to settlement. Once this amount has been provided by the lender your solicitor/conveyancer will calculate the additional funds required to be provided by you to settle. These are known as shortfall funds. You solicitor will have you transfer the shortfall funds a few days prior to settlement to either their trust account or a shortfall account to allow for the upload of funds for settlement by your bank.
If you are not borrowing to finance the purchase, your solicitor/conveyancer will have you transfer the total funds owing to their trust account prior to settlement to allow for the distribution of funds.
Collecting your keys
Once settlement has been completed, your solicitor/conveyancer and the vendors solicitor/conveyancer will notify the agent. The agent will then release the keys to you ready for you to enjoy your new home.
For more information on Purchasing Property check out our other blogs:
Part 1: Finance and Deposits
Part 2: Stamp Duty
Part 3: Review of the Contract
Part 4: Property Reports
Part 5: Exchange of Contracts
Part 6: Planning your move
Part 7: Final Inspection
You may also be interested in our Selling Property series:
Part 2: Selecting an agent
Part 3: The Contract for Sale
Part 4: Exchange of Contracts
Part 5: Discharge of Mortgage
Part 6: Planning your move
Part 7: Settlement
If you have any questions or need any assistance please do not hesitate to contact us at Southern Waters Legal. We offer a free 15 minute, no obligation chat if you want to go through your circumstances.