Six Tips to a Successful Property Settlement

Author – Graeme Salt

Along with death and divorce, buying a property is one of the most stressful things you will ever do.

The process of buying a property takes three to six months.  But the stress comes in the final few weeks and days.  Get these finals days right, you are in ecstasy.  Get it wrong, you could lose quite a bit of money and you will feel sick for quite a while afterwards

Here are my six tips for having a stress-free settlement on your property and setting yourself up for the next stage in your life.

1. Sign your Loan Contracts and Mortgage ASAP

When the bank approves your loan they send you a massive pile of legal documents – it’s important that you sign these and get them back to the lender straight away.

Think about it, the bank might be lending you a few million dollars.  They are not going to just hand over a cheque with no questions asked.  They will only lend you the money if you use your new property as security and they will only advance you the money on the day you settle on that property.

2. Make Sure Your Discharge is Arranged

If you already own a property and are selling it, in order to buy another property, it’s important that you are ready to payout your existing lender in time for you to buy your new place.  Surprise, surprise your current lender is in no rush for you to go – so they wont exactly rush through the discharge of your current mortgage.

Don’t give the outgoing bank enough warning and you could make a real mess of your next purchase.

3. Choose a Good Mortgage Broker

A good mortgage broker does more than arrange a loan for you.  A good mortgage broker holds your hand from the first time you talk finances to the day you pick up your keys – and beyond.

When you are looking for finance for a property, shop around for the right mortgage broker.  Chances are they will have access to pretty-much the same lenders – but it’s how they manage you and the banks that is key.

Every now and then a bank really stuffs things up and its vital you have an experienced broker who understands that each bank does things differently – and then how to fix things for you.

4. Choose a Good Lawyer or Conveyancer

This is really an extension of the point above.  Your solicitor makes sure the purchase contracts are correct, and then works with the solicitors representing the seller and the banks so that what was theirs’ becomes yours.

This process is complicated – so its vital that your solicitor explains what is going on.  Last week I had a first-time buyer couple whose solicitor just did not keep them in the loop.  Buying a home is stressful enough without someone keeping you in the dark.

I would like to think that it was I and my team that told the client what was going on and kept their stress-levels manageable.

5. Make Sure All Your Funds are in One Spot and Available

The banks like to lend you 80 per cent of the value of a property.  In which case, at settlement, you will have to have your 20 per cent (plus stamp duty) available – otherwise the purchase is not going to happen.

It’s easier for your solicitor to use those funds towards the purchase.  Increasingly you can even stick the money in your offset account and your lender can deduct the funds at settlement.

6. Take the Day Off

Settlement day can be chaotic and last-minute things can happen.  But the real reason why you should take the day off is because you can then go get the keys to your new place and savour your new home.

If you would like to know more about settling on a property (or how much experience I have at it ?) please contact me on 1300 30 67 67.