You are here: Home Tools FAQ How does settlement work?

How does settlement work?

On settlement day you pay for your house and its ownership (title) changes from the previous owners to you.

This all sounds simple, and from your perspective it is simple, but in the background the money needs to change hands, your new ownership is recorded on the title and the bank's mortgage is registered, and this involves your lawyer. 

On settlement day there really isn't very much for you to do, most of it is taken care of by your lawyer.  However, there are a few things to do before settlement to make the day go smoothly.  

  1. The house must be insured
  • Your lawyer will need a certificate of currency from an insurance company to confirm that the house is adequately insured. 
  • We will discuss this with you prior to settlement, and can take care of it for you.  
  • Connect or re-directed services
    • Gas and Electricity
    • Water
    • Telephone / Internet
    • Sky / Pay TV
    • Newspaper

     

    The money changes hands

    Regardless of how you purchased the house (auction, tender, private treaty etc), you will have probably paid a deposit.  On settlement day you need to pay the rest of the purchase price.  In most cases, some or all of this money will be coming from a bank or mortgage lender.  Drawing down your loan from the bank is taken care of by your lawyer.

    Your lawyer does several things before and after settlement but on settlement day, these are the key things that are done for you.

    • Draw down the loan.
    • Pay the vendor the balance owing and ensure that title to the property transfers from the vendor to you.
    • Register the change of ownership from the vendor to you and register the lender's mortgage on the title.

    While the money changes hands on settlement day, so you can get the keys and take possession of the property, the registration of the ownership changes and the mortgage can occur shortly afterward.

     

    Congratulations! The house is yours

    Home ownership comes with many pleasures and some unavoidable costs. 

    Your main cost will probably be your loan repayments however there should be no surprises and these costs should be manageable.