Settlement day isn’t just a matter of receiving the keys to your new home or investment property and moving in, but rather a series of many steps that need to take place, and important aspects that you need to ensure you’re prepared for. Whether you’re the buyer, seller, homeowner, or investor, there is much to be aware of when it comes to preparing for the settlement of a property.
This week our team at Loansuite has put together our ten top tips to ensure that you’re prepared for the settlement of your property.
- Ensure that the funds are ready and in the right place
It’s important that you ensure, particularly if you’re the buyer of the property, that you have all of the available funds ready for settlement in the right account. If they’re held in your bank account, then it’s important to ensure that the bank has the required authority on file for you to draw these funds.
Your solicitor, or conveyancer, should be able to provide you with a full breakdown of the amount of money that will be required at settlement. It’s always a good idea to have a little extra in the bank account to ensure that settlement doesn’t have to be delayed simply because there wasn’t enough in the bank account. It’s important to be aware that it’s not just the rest of the deposit that will be required, but also the funds for the registration of the mortgage, any title fees, costs to be paid to your conveyancer, and other aspects. You can find out more about the other costs involved here.
- Be ready for your final inspection
On the day of settlement, you or someone that you authorise, should carry out a property inspection to ensure that it’s in order and in the same condition that it was in when the contract was signed. It may be a good idea to ensure that photographs are taken at the same, and saved on file for future reference. If there are additional items that were to be left, such as pool cleaning equipment, or other fixtures and chattels included in the contract, ensure that they are in fact still on site.
If there are any issues identified during this final inspection, it’s a good idea to raise them early so that they can be rectified prior to settlement.
- Update the water and sewerage charges
Depending on the relevant state or regional body, the charge for water usage and sewerage will be run on a quarterly basis and is generally paid to the end of the current quarter by the vendor, prior to being transferred over to the purchaser. This will be paid by you once you take ownership of the property, or at a separate date that is agreed between the purchaser and the vendor.
- Take out building and other appropriate insurances
When you take ownership of a new property, it’s important to ensure that you have the right insurance policies in place. This could include the following:
- Landlord’s Insurance: This is important if you’re going to rent out the property
- Contents Insurance: Valuable if you’re going to live in the property.
- Building Insurance: To ensure that you’re protected in the event of a fire or other damage to the property.
Depending on your property, you may want to speak with your solicitor about other types of insurance that may be relevant for you.
- Lock and keys
A critical part of settlement day is collecting the keys for your new property. Depending on your own situation and the property itself, you may wish to consider changing the locks, in addition to any alarm or security access codes as part of the property. While this might seem overly cautious, it can be good common sense just to avoid any nasty surprises later on.
Also, ensure that you have a spare set of keys, and if you’re renting out the property, ensure that both you and your property agent have a set if necessary, which can be particularly handy if you don’t live in Australia or the same state or territory as your property.
- Update your Will & estate planning documents
This is not necessarily one that immediately springs to mind when it comes to preparing for the settlement of your property, but whether you’re the purchaser or the vendor, this may be time to update your Will and other estate planning documents. If you’ve specifically mentioned the property itself, wish to do so, or need to update other elements of your estate plans given the change brought on by settlement, this is an excellent time to ensure that your affairs are up to date.
- Arrange quantity surveyor reports where relevant
If the property you’re buying is relatively new, or if there have been recent renovations and you’re renting out the property, it may be sensible to arrange a quantity surveyor’s report to ensure that you can claim all of your eligible non-cash deductions. The building costs of a property typically have a depreciable life of up to 40 years, while the depreciable lives of fixtures and fittings vary more and are much shorter, but these may create a significant difference to your tax bill at the end of the financial year.
- Ensure that your rental agent is advertising pre-settlement
If you’re going to be renting out the property that you’re buying, you may wish to arrange with the rental agent to be advertising the property in advance of settlement, providing they can get access to photos of the property and of course arrange inspections where possible. This may not always be possible, depending on the vendor, but this can save a significant amount in the early days of taking ownership of your new property.
- Check on any council rate adjustments
If you’re the buyer of the property, then you will now start to be eligible to pay the council rates for your new property. If you’re the seller, naturally you would no longer need to pay these. The rates are usually adjusted between the purchaser and the vendor based on the settlement date. You may wish to check with your solicitor, or conveyancer, on what these fees are payable maybe just to ensure that there are as few post-settlement surprises as possible.
- If you’re moving in, pack an overnight bag
If you’re buying your new home or even your first home, it can be a great idea to pack an overnight bag in addition to the general items that are typically being relocated by your appointed removalist. This just ensures that you know you have access to fresh clothes, toothpaste and a toothbrush, chargers for your phone, and anything else you may need, and perhaps even a drink to celebrate your new home.
Buying, or even selling a property can be a significant milestone for many, so above all else, celebrate the successes along the way, and ensure that you’re adequately prepared for the settlement of your property.
If you have any questions about preparing for the settlement of your property, reach out to our team at Loansuite for a complimentary discussion.
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