Have you ever wondered what it means when people talk about settlement? We’ve pulled together the main questions first home buyers ask about the settlement process, to help you on your home ownership journey.
What is a settlement agent?
A settlement agent, or conveyancer, is licensed and qualified to prepare the legal documentation you’ll need when buying or selling a home. They represent and work for you.
A settlement agent acts as a go-between with your real estate agent, bank, or broker. They make sure everyone is on the same page and have what they need to meet the conditions of your contract and see the transaction through to settlement.
The settlement agent will:
- complete and lodge the documents to transfer ownership on the Certificate of Title,
- ask questions about the property title, rates, stamp duty and zoning, and check the inspections and special conditions in the contract have been met,
- keep you up to date on the progress of your new home purchase and any problems that may come up,
- handle the transfer of at settlement, and
- complete settlement on your behalf.
Do I need a settlement agent?
If you’re buying or selling a property, you will need a settlement agent to represent you and manage your settlement.
We don’t suggest trying to look after your own settlement as it can be a difficult process. Having someone who knows what they’re doing is advised.
How do I choose a settlement agent?
You can either appoint a settlement agent yourself or your real estate agent can recommend one to you. To make sure there are no conflicts of interest, it is recommended you choose a different settlement agent to the seller.
When do I need to hire a settlement agent?
If your offer is accepted, you will go through the settlement process. This is where ownership is passed from the seller to the buyer. Your finance approval will also take place and you’ll pay the balance of the sale price. This is when you will need a settlement agent to help you finalise the deal.
You may want to hire a settlement agent before you sign your contract, so they can be across any of the conditions of the contract.
What are the costs involved in hiring a settlement agent?
The settlement agent fee will depend on your loan amount, the value of the property, your location, and your settlement agent. Fees range between $600 and $2,000. This doesn’t cover any extra expenses involved with the settlement, such as stamp duty, council rates or bank settlement costs, so keep that in mind. Find out more about the costs involved when buying a home.
What is the settlement timeline?
Settlement usually takes between 30 to 90 days and depends on what was agreed in the contract’s Offer and Acceptance (O&A).
You may need to start your finance application at this point if you don’t have pre-approval from your bank. Your finance will need to be approved ahead of settlement day.
What happens on settlement day?
Settlement day is when you become the legal owner of your new home.
Your settlement agent will represent you on the day and make sure settlement proceeds and documents are finalised.
It’s also when you can celebrate becoming an official homeowner!