How does settlement work: a step-by-step guide
Posted on 7 Jun 2017
Settlement sounds like a singular action but it’s actually a series of activities that take place to secure your new block of land or home – and there’s a series of people who help make it happen.
Conveyancing is the process that transfers ownership of a legal title of land from one person or entity to another and it varies slightly from state to state, as does the sales process. For example in some states there’s a cooling off period for auctions but not for private sales.
It’s helpful to understand these details before you start making offers. You could consider getting professional guidance and engaging a conveyancer or solicitor to guide you through the legal processes.
Conveyancers are licensed, qualified professionals who provide advice and information about the sale of a property, prepare documentation and conduct the settlement process. Many solicitors also undertake conveyancing work.
DIY conveyancing is not recommended as even the most simple-looking transactions can become complicated by legislation and regulations – planning controls, permitted uses, heritage issues, body corporate constraints and a myriad of other matters.
Once you start looking at a property or make an offer, you’ll need to check the certificate of title. Ask the property developer for title details or the agent on an established home.
There are various forms of title in Australia including freehold Torrens title, Strata title, Company title/share, General Law or Old System title, leasehold and community title. Each type of title comes with its own legalities, so use your conveyancer’s expertise – they’ll research the property, check the type of title, check for easements, mortgages or caveats and any other matter that needs addressing.
Once you’ve found “the one”, you may need to get the inspections arranged, especially on existing homes. Have licensed and insured professional inspector do a property, building and/or pest inspection.
Now get ready for the avalanche of paperwork! The legal paperwork needed to buy a property varies by state and territory but is likely to include contract paperwork (contract of sale, memorandum of transfer, etc), settlement, land transfer, mortgage and type of ownership (eg joint tenants, tenants in common). Your conveyancer will take care of all this.