From “Under Offer” to “SOLD”
From Under Offer to Sold
You have accepted an offer and your property is now under contract.
So what must now happen to take us from “Under Offer” to “SOLD”?
A series of steps must now be taken to ensure that any mortgages and/or debts against the property are discharged so that the transfer of land and exchange of monies can take place.
This is called property settlement.
Settlement can be complex and is usually handled by a specialist conveyancer, settlement agent or solicitor. We will ask you to nominate a professional to take you through settlement. These professionals do charge fees for their services and you may wish to obtain quotes.
One of the most important and time consuming steps in property settlement can be discharge of a mortgage or mortgages. If you have paid off your mortgage, it is wise to double-check with your bank to ensure that the mortgage has been discharged. It is possible to have completely paid off your loan but to still have an undischarged mortgage, so even if your loan has been paid out, please check with the bank and make sure that the mortgage was formally discharged at the same time, otherwise settlement may be delayed for several weeks and you may incur financial penalties as a result.
Some processes can take several weeks to finalise, so please ensure that any documentation you receive from your settlement agent is completed, signed and returned as quickly as possible. If you have any queries or concerns, please raise these with us or with your settlement agent.
Please remember that until settlement is finalised, you remain responsible for any risk associated with the property, so it is essential that you retain your insurance and only cancel it once settlement has taken place.
The Settlement Process
When an offer is made, there are usually clauses on the contract of sale which are referred to as ‘conditions.’ Common conditions include –
- Subject to Finance – the purchaser needs to borrow money to buy your property.
- Subject to Sale – the purchaser needs to property to fund the purchase of your property.
Should either of these conditions not be met, the sale will most likely not go through.
If the offer on your property is subject to finance, there will be a time limit specified on the contract which gives a day by which the purchaser must obtain unconditional approval. You can expect a visit from a property valuer acting on behalf of the purchaser’s bank. The valuer will need to carry out a sworn valuation for the bank. It is important that the valuer be given access to the property so that the purchaser’s finance application can proceed.
If you are uncertain about anyone requesting access to the property, please contact us or your settlement agent to discuss your concerns.
Once the contract becomes unconditional, your settlement agent will commence:
- Preparation of a settlement statement
- Arranging a settlement date
- Giving the purchaser’s settlement agent all relevant information/documentation
- Providing evidence of completion of conditions by the seller (e.g. repairs agreed to in the contract) to buyer’s settlement agent.
- Documenting evidence of completion of conditions the buyer is responsible for (e.g. termite inspection, building inspection etc.)
- Sending a “Disbursement Authority” to the seller (authorisation and instructions on how the proceeds of the sale are to be distributed.)
- Getting the stamped, signed, Transfer of Land from the buyer’s settlement agent, checking it and arranging for execution by the seller.
- Ensuring that all encumbrances (mortgages, caveats etc.) are discharged/withdrawn before settlement
Your settlement agent will also:
- Carry out Verification of Identity – due to recent identity and property fraud cases, the law has been changed to make this compulsory. The Verification of Identity carried out by your settlement agent must by law be done in addition to the Client Identity Verification that we carried out when you first listed your property with us.
- Provide a final Settlement Statement of adjustment of rates and taxes, and other financials to you, the buyer’s settlement agent and any lenders
- Ensure water and council rates are up to date at settlement
- Request the deposit paid by the purchaser (less commission and approved costs) from our office’s Trust Account to ensure all funds are available at settlement
- Liaise with you and other relevant parties to
- seek resolution of any disputes that may develop; and
- advise of any action needed to ensure settlement proceeds on time.
From time to time, complications can arise. There may be stumbling blocks to finance, or a property being sold to fund the sale of your property may take longer to sell than originally anticipated. At each stage, there are options open to you. Our staff can advise and guide you through the process, as can your settlement agent. It is vital, even in uncomplicated property settlements, to keep all lines of communication open to ensure that everything runs as smoothly as possible.
If you have any queries about the sale and/or settlement processes, we are here to assist you.