Many new home buyers new to the housing market may wonder why it takes few weeks to a month to reach settlement after signing the purchase/sale of the contract. Below are some details to help you understand this process.
What does settlement exactly mean?
Settlement is the legal process that involves transferring a property title from one party to another. It is not just the process of signing the contract but it is the full process of bringing the contract into effect. It involves checking all the necessary legal government documents, finalising all liabilities between Purchaser and Vendor.
Potential challenges faced in property settlement
By preparing the contract, your real estate agent or solicitor needs to check all documentation such as are there any Caveat on the title, are there any active tenancy for the property, etc. Following on from there, your solicitor or conveyancer will make sure all outstanding balance are finalised before settlement date.
However, there might be other events causing delays, for instance:
- Purchasers may need settlement extension to arrange their finance;
- Mistakes found within the process at banks, e.g. wrong amounts on the cheques, errors arising from a lack of understanding/language barriers;
- Banks are not ready before settlement date since the documentation are not ready for them to discharge mortgage or approval the loan;
- Finance becomes unavailable due to purchasers’ personal circumstances.
To minimise unnecessary delays and smoothen your settlement process, it is good to have your solicitor or conveyancer manage your property settlement by looking into your contract and your Form 1, and explaining all the details before signing any documentation. You should also be aware that there are financial ramifications and risks involved in a delay in the settlement process. It is important that you seek professional advice so you can avoid any issues in this process.
At Straits Lawyers we specialise in Conveyancing, Property Law, Family Law and Wills & Estate Planning. If you are planning to sell your property or purchase a new property, we are here to help you through this process. Come in to have a confidential discussion with us.
We can be contacted by email at email@example.com or phone us at (08) 8410 9069.