Many first-time home buyers tend to be confused about the process, but they may be especially worried about what happens on settlement day. In fact, they may be so worried that they may think it's likely to be more of a judgement day than anything else! It helps to understand the entire process involved and to be as prepared as possible, so that this all-important day goes by without any problems. What do you need to bear in mind, so that you can be on the ball, as well?
Understanding the Process
A number of different processes are involved whenever a home is bought or sold and this will introduce several different individuals or organisations, all playing their part at the right time. However, the actual process involved in coming to a settlement need not take very long at all, so long as all of the paperwork is in order and previous deadlines have been met.
Your settlement agent (or conveyancer) will first of all need to coordinate the date and time for all affairs to be finalised with the seller's agent and with your lender, if appropriate. They will then need to attend this meeting for you and handle all transactions.
If your agent is experienced and competent, then all the necessary documents will have been prepared in advance and verified before the meeting begins. This will include detailed discussions with the mortgage broker or lender to make sure that your finance is all ready, that the final inspection of the property has taken place and everything is ready to go.
The figures will have been adjusted carefully to take into account the precise moment when the seller relinquishes responsibility and you, as the buyer, takes everything on. Rates and taxes will need to be adjusted accordingly and any outstanding monies paid to local authorities or utility companies, before all the relevant accounts may be transferred into your name.
While in an ideal world all accounts would be correlated very precisely ahead of time, it's not unheard of for an additional expense to appear at the last moment. In this case, some buyers agree to set up a shortfall account, which can in these circumstances be used to rectify anything that's outstanding, so that settlement can proceed without being pushed back.
It's always good to get a settlement agent who is highly experienced in not only the procedure, but the various laws that cover the process. Make sure that you choose your conveyancer based on their knowledge and ability, so that everything goes smoothly for you.