After spending months searching and deciding on the property of your choice, you’re ready to seal the deal. However, the process can be more complex than you think and involves more than just paying for the property and picking up the keys. Understanding the basics of property settlement can help you navigate through this legal framework and work out a deal that is in your best interest. Here are a few things to keep in mind before you finalise the settlement offer:
1. What is Property Settlement?
Property Settlement is the legal process to transfer the ownership from the property seller to the property buyer. This process is conducted conventionally by the legal and financial representatives of both parties.
While you can negotiate the settlement by yourself, legal and financial representatives are professionals who will aim to protect your interest by ensuring the documentation is correct. They are also in a better position to advise you on paying taxes, stamp duty and other legal paperwork required.
2. What is the settlement period on a house?
The date of the settlement is set by the seller of the property. Usually, the settlement period is between 30 to 90 days from the day the contract of sale is signed. However, this can be negotiated.
3. How can I prepare for settlement?
The best you can do is make sure all your documents are in line and you’ve crossed off each of the items on the below checklist.
The contract of sale is signed and dated with an agreed-upon settlement date.
Financial arrangements like stamp duty, home insurance, etc have been organised prior to the settlement day.
Ensure documents are filed for the registration of the property and other paperwork is completed.
Your representatives have conducted a title search and any third-party owners holding rights over the property have been removed.
You are entitled for a property inspection before the settlement date. So, make sure the property is in the same condition on the settlement day as it was when you signed the contract of sale. A few things to pay close attention to would be wall fittings, heating/cooling systems, and other structures. You can also arrange for a building inspector for a professional opinion.
4. What to expect on the day of settlement?
Your legal or financial representatives will be the professionals managing this for you from liaising with the bank to arranging the meeting with the seller and their representatives.
They will make sure that other fees like transfer duty, taxes etc have been taken care of. You don’t need to be present on the settlement day. All documents can be signed by you and handed over to your representative beforehand. Once this is completed, you can legally take possession of the property.
5. What happens after the settlement?
Until the day of the settlement, the rates and other fees of the property were the responsibility of the seller. Now that ownership has been transferred and you are the titular owner of the property, after the settlement day these expenses are now your responsibility.
Property settlement can be exciting and stressful at the same time. Just remember to find representatives you trust and double-check your paperwork thoroughly. After all, this will be a decision you will be living with for a long time. The best you can do is to know what to expect and prepare for the same.
For more information property settlement, read our article on 7 ways to reduce your apartment settlement risk.
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