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If you’re buying a house and researching home loans for the first time, it can seem overwhelming. First, there are the sales negotiations to get through, then all the financial approvals and finally, it gets closer to settlement. But what exactly happens at settlement?

Celebrating your success is one thing but then there is the serious stuff – dealing with insurance issues, removalists, conveyancers, real estate agents and a seemingly endless list of real estate-related professionals.

Then, suddenly, it’s settlement day – and ‘settled’ is probably the last thing you’re feeling.

Instead of letting settlement day stress ruin your good mood, get your head around what needs to be done and focus on the fun part – enjoying your new property.


What is settlement?

Put simply, settlement is the official process that happens between the financial and legal representatives of both the seller and yourself as the buyer.


Settlement Day

The time and place is agreed upon by the parties involved – a date and time when your conveyance or lawyer meets the representatives for the vendor. With the important documents signed by both parties, they are sent off to the titles office and you are registered as the new owner.

In the lead-up to the big day, it is the responsibility of your conveyancer to liaise with your mortgage broker or financial institution to ensure the funds are available at the right day and time. If there is a shortfall that you need to provide, your conveyancer will discuss this with plenty of time to ensure the funds are transferred from your nominated bank account.


Preparing For Settlement

Incoming property owners do have the opportunity to do a final inspection of the property before settlement day. Not sure what you’re looking for? If it puts your mind at ease, you can hire a professional to do it for you. This is where working with a buyer/vendor advocate can be a definite bonus because they become the experienced middle point between you and the real estate agent and may give you more confidence that you are receiving impartial advice.

The point of this important final inspection is so you can confirm the house you just bought is in the same condition it was when you made the decision to buy it.


Potential Settlement Problems

Luckily, problems on settlement day are rare – so no need for a sleepless night.

If things do crop up – such as a piece of documentation going missing for example – the worst that will happen is that settlement might be pushed back to allow extra time. If this is the fault of the vendor’s team, and if this contingency was covered in your contract of sale, you may receive financial compensation for each day the settlement is late.

After settlement your lender draws down your loan – and debits the amount they’ve paid your vendor at settlement from your loan account. That is the start of your mortgage.

What’s next? Enjoy your life as a property owner – and always pay your mortgage on time.

And, in a couple of years, after a solid track record of meeting your repayments, consider talking to your mortgage broker again to see if it is worth you trying for an even better deal.

For more information on what happens at a property settlement, you can contact Lending Specialist on (03) 8805-1800 or email

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