How to Prepare for Property Settlement
Property settlement is the final step in the process of buying or selling a home. It involves the legal transfer of ownership from the seller to the buyer and the payment of the remaining balance of the purchase price. Proper preparation for settlement can ensure a smooth and stress-free transition. Here’s a comprehensive guide on how to prepare for property settlement.
1. Understand the Settlement Process
Settlement is a legal process that involves several parties, including the buyer, seller, their respective lawyers or conveyancers, and the bank or lender. It typically takes place over a few key steps:
- Pre-Settlement Inspection: This is your opportunity to check that the property is in the same condition as when you agreed to buy it.
- Signing Documents: You will need to sign various legal documents, including the transfer of title and mortgage documents.
- Payment: The balance of the purchase price is paid to the seller.
- Transfer of Ownership: The property title is transferred to the buyer’s name.
2. Conduct a Pre-Settlement Inspection
A pre-settlement inspection is crucial to ensure that the property is in the agreed-upon condition and that all included chattels are present and in working order.
Tips:
- Schedule the Inspection: Arrange the inspection at least two working days before settlement day to allow time for any issues to be addressed.
- Bring the Sale Agreement: Take a copy of the sale and purchase agreement to verify that all conditions have been met.
- Check for Damage: Look for any new damage that may have occurred since the agreement was signed, such as storm damage or damage from moving out.
- Verify Chattels: Ensure that all listed chattels, such as appliances and fixtures, are present and functional.
- Confirm Repairs: If the seller agreed to make any repairs, check that these have been completed to your satisfaction.
3. Organise Your Finances
Ensuring that your finances are in order is a critical step in the settlement process.
Tips:
- Secure Funding: Confirm that your mortgage or loan is approved and that the funds will be available on settlement day.
- Arrange Payment: Your lawyer or conveyancer will handle the payment of the purchase price. Ensure you have transferred any required funds to their trust account in advance.
- Review Settlement Statement: Your lawyer will provide a settlement statement detailing the final amount payable, including adjustments for rates and other outgoings.
4. Coordinate with Your Lawyer or Conveyancer
Your lawyer or conveyancer plays a vital role in the settlement process. They will manage the legal aspects and ensure that everything is in order.
Tips:
- Sign Documents: Visit your lawyer to sign the necessary documents, including the transfer of title and mortgage agreements.
- Verify Identity: Your lawyer will need to verify your identity before proceeding with the settlement.
- Communicate Regularly: Keep in touch with your lawyer to stay updated on the progress and address any questions or concerns.
5. Plan Your Move
Moving can be a hectic experience, so planning ahead can help reduce stress on settlement day.
Tips:
- Book a Moving Company: Arrange for a moving company well in advance and consider scheduling the move for the day after settlement to allow for any unforeseen delays.
- Transfer Utilities: Set up or transfer services such as electricity, gas, internet, and phone to your new address.
- Notify Relevant Parties: Inform your current landlord if you are renting, and apply to get your bond back. Update your address with banks, insurance companies, and other essential services.
6. Prepare for Potential Issues
While most settlements proceed smoothly, it’s wise to be prepared for potential issues that could arise.
Tips:
- Plan for Delays: Be aware that delays can occur, especially if there are multiple transactions in the chain. It’s advisable to plan your move for a day after settlement to accommodate any delays.
- Know Who to Contact: If issues arise, such as damage found during the pre-settlement inspection or delays in payment, contact your lawyer immediately to resolve the problem.
7. Final Steps on Settlement Day
On settlement day, several key activities will take place to finalise the transfer of ownership.
Tips:
- Payment and Transfer: Your lawyer will transfer the purchase funds to the seller’s lawyer and arrange for the transfer of the property title.
- Collect Keys: Once the transaction is complete, you can collect the keys from your lawyer or the real estate agent.
- Confirm Ownership: Your lawyer will notify you once the ownership transfer is registered with Land Information New Zealand (LINZ).
Preparing for property settlement involves careful planning and coordination with various parties. By conducting a thorough pre-settlement inspection, organising your finances, working closely with your lawyer, and planning your move, you can ensure a smooth and successful settlement process. Remember, the key to a stress-free settlement is preparation and communication.