You've been looking for months, attended auction after auction and finally secured a winning.
Between the celebrations you try to wrap your head around everything you need to organise.
Insurance, removalists, conveyancing – the list seems endless.Before you've had a chance to catch your breath it's settlement day.
If you're feeling less than settled at this point, you're not alone. Home buyers can be prone to assume the worst until the keys are securely in their hands.
Don't let settlement day send you into a spin. With a little understanding, and some preparation, you'll be unpacking boxes and feng shui-ing your lounge room in no time.
What is settlement?
Settlement is the official process conducted between the legal and financial representatives of both you and the seller.
Settlement day happens on a time and place agreed upon by both parties. Your settlement agent (solicitor or conveyancer) and your lender meet the seller's representatives. Once all documents are signed by both parties, they are sent to the titles office to register you as the new owner of the property.
What happens on settlement day?
Melbourne home owner Alice Hodges recently settled two properties within an hour of each other. "I'd never done that before and was worried that the funds needed to 'clear' from one settlement to the other," Hodges says.
Hodges' conveyancer, Jo Richmond from Law554, says all the documentation is organised well before the settlement date. "We like to do this so we can check the paperwork and make sure it's executed by all parties," Richmond says.
"Where there's a bank involved we start talking to the bank to figure out if there's any shortfall that the client needs to provide at settlement.
"We let the client know that they'll need 'x' amount of money and they need to nominate a bank account from which to withdraw the shortfall. On our advice the bank will withdraw those funds."
These were the funds that Hodges was worried about. Despite assurances from Richmond and her bank that everything was in order, she was still slightly stressed prior to settlement day.
"I'm now slightly embarrassed at how much I was stressing beforehand. I bet conveyancers and mortgage brokers see this all the time," she says.
I'm slightly embarrassed at how much I was stressing beforehand.
How do you prepare for settlement?
According to Richmond, the hardest part of settlement day for her clients is packing up and cleaning the home and disconnecting and connecting the utilities. "We take care of the paperwork so they can get on with the cleaning."
"Probably two weeks out from settlement we're trying to finalise our figures in relation to council and water rates.
"We write to the council and water authorities advising them of a change of ownership, but they will have to ring up and get their gas and power connected," Richmond says.
You'll also have the opportunity to do one final inspection of the property before settlement day. If you can't do it yourself, or don't feel confident that you'll know what to look for, you can hire a professional to conduct the inspection for you. The point of the final inspection is to ensure the house is in the same condition as it was when sold.
The final inspection is a chance to check everything is in working order.
You don't actually need to be present on settlement day if you don't want to as your representatives can take care of all documentation and financials. However, you will be needed to oversee the removals process.
"We let clients know 7-14 days beforehand when the settlement times are scheduled so their can organise their moving company," Richmond says.
"I let our removalists know that they'd have a couple of hours rest in between loading our truck from our old place, and delivering it to our new place (pending settlement)," Hodges says. "They were fine with that and had done it before."
Hodges says her best preparation was making sure her conveyancer and mortgage broker had absolutely everything they needed.
"You really need to do everything they say, and give them everything they need. Then it's out of your control."
Hodges was notified no more than ten minutes after both scheduled appointments and told everything had gone through.
"What a relief. The best bit was being told, 'congratulations – go and get your keys!'"
What can go wrong?
Richmond says hiccups rarely occur but when they do it is usually be resolved on the same day.
"There have been instances of clerks turning up at settlement missing a document. If those things happen everyone scrambles together to try and solve the problem as soon as possible.
"Sometimes settlement is pushed back to allow the offending parties to rectify the problem. We always work to settle it on the same day that it has been scheduled because we know that most of the time people need to move into the property."
What happens after settlement?
After settlement your lender will draw down your loan – debiting the amount they've paid at settlement from your loan account.
Richmond says she sends a final reporting letter to her clients after settlement, informing them that settlement was completed and the money was received on their behalf. "We will also write to the authorities advising them of the change in ownership. Where there is a bank involved, the bank will report a breakdown of the loan distributions.
"There's not much to do for them except enjoy the home."
Hodges says aside from a couple of minor things like nominating a bank account for the sale proceeds, there was nothing left to do except celebrate.
"Once you've got the keys, you're in, can unpack and enjoy your new home."