We work with a lot of clients who are buying or selling their first property and are new to the conveyancing process and not sure of all the steps involved. One of the questions we get asked most frequently is ‘do I have to come to settlement?’ So we thought we’d put together a bit of a summary of the settlement process to help.
To start with though, in answer to the above question, no you don’t need to come to settlement.
What is settlement?
Settlement is the final step in the conveyancing process and it is at this point that the formal change of ownership of the property occurs. Settlement is attended by your conveyancing solicitor, the solicitor for the other party and where a mortgage is involved a representative for the bank. So any settlement may involve between two and four parties. Your solicitor will attend on your behalf to ensure the change of ownership proceeds correctly and will contact you immediately following settlement to advise you that the process has completed.
What happens at settlement?
If you are buying a property your conveyancing solicitor will attend, taking with them the fully executed transfer documents that have been signed by the seller and that your solicitor has also signed on your behalf. They will also undertake a final title search of the property on the morning of settlement to ensure that there has been no changes to the property’s ownership, or any additional encumbrances or notices lodged. They will take this title search to settlement as well.
Buying a property in Queensland:
If you are purchasing without finance your solicitor will have previously arranged bank cheques with you that they will also take to settlement. If you are taking out finance for the purchase of your property a representative of your bank will attend and they will bring with them the bank cheques for settlement. Your solicitor will provide them with the transfer documents and title search and they will provide the cheques to your solicitor who will check them.
Your solicitor will then provide the cheques to the seller’s solicitor who will ensure that they have received all the funds required for the purchase of the property. The exact amount will have previously been worked out and agreed upon by each solicitor on a settlement statement.
If the seller has a mortgage their bank will also attend settlement and provide your solicitor with a release of mortgage form, which they will check and either register after settlement, or provide to your bank who will then register it after settlement.
Once each party is happy with the documents or cheques they have received then the property is deemed as settled and you will be proud owner of a new home.
Selling a Property in Queensland:
If you are selling your property then the process is reversed. Your solicitor will have provided their cheque directions to the buyer’s solicitor prior to settlement and will collect these cheques from the buyer’s solicitor, or the buyer’s bank. They will then check these cheques are all correct and where you have no mortgage they will then arrange for the settlement funds to be deposited into your bank account.
Where you have a mortgage on the property, your bank will also send a representative to settlement who will bring with them the release of mortgage document and provide this to your solicitor, who will check it is correct, before providing it to the buyer’s solicitor. Your solicitor will collect all the cheques required for the purchase and check these are correct, before handing them to your bank. Your bank will then collect these cheques and arrange for your mortgage to be paid out in full, before paying to you the surplus amount.
PEXA Electronic Settlement Process:
The above manual method, where each party physically attends a location for settlement is still the most common method for settlement and until very recently was the only method. New to Queensland is PEXA electronic conveyancing, which will streamline the process, meaning that settlement can occur online and there will not be a need for all parties to attend to a physical location.
PEXA is currently in the early stages of rollout in Queensland.