The ‘settlement’ is a crucial step in the buying or selling process of real estate in Perth. It involves the legal and financial transfer of property ownership from a seller to a buyer. The property settlement process can be complex, involving a number of parties and documents. In this article, we will provide a comprehensive overview of the property settlement process in Perth, highlighting key steps and important considerations.
Step 1: Entering into a Contract of Sale
The property settlement process typically begins with the buyer and seller entering into a legally binding contract of sale, often referred to as an “O&A” or “Offer & Acceptance”. This contract outlines the terms and conditions of the transaction, including the purchase price, deposit, settlement date, and any special conditions relating to the offer.
Step 2: Engaging a Settlement Agent or Conveyancer
It is advisable for both the buyer and seller to engage the services of a qualified settlement agent or conveyancer before they plan on signing a contract. These professionals will oversee the legal and financial aspects of the settlement process, and can check the contract before you sign it, ensuring that all necessary documentation and requirements are met.
Step 3: Conducting Property Inspections and Searches
During the initial settlement period, the buyer may conduct inspections of the property to ensure it is in the expected condition. Additionally, the settlement agent or conveyancer will carry out various property searches, such as title searches, planning and zoning checks, and local authority rates enquiries to identify any potential issues and outstanding costs that may affect the property’s title or value.
Step 4: Securing Finance
If the buyer requires a loan to complete the purchase, they will need to secure a loan from a financial institution. The buyer should engage a mortgage broker to assist with the loan pre-approval before putting an offer on a property. The settlement agent will liaise with the buyer’s lender of choice to ensure all necessary mortgage documentation is prepared and submitted for the loan approval and settlement processes.
Step 5: Exchange of Documents
As the settlement date approaches, the settlement agent will facilitate the exchange of title documents between the buyer and seller. This includes the transfer of ownership document, signed by the seller, and the buyer’s financing documentation. Most of this process is now undertaken via the online platform, PEXA, improving efficiencies and security.
Step 6: Adjustments and Settlement Statement
Prior to settlement, the settlement agent will calculate final adjustments for rates, taxes, and other applicable fees, accurate to the date of settlement, ensuring that the buyer and seller are responsible for their respective portions up until the settlement date. These adjustments are detailed in preliminary and final settlement statements, which outline all financial obligations and disbursements.
Step 7: Settlement Day
On the agreed settlement day, the settlement agent arranges for the transfer of funds from the buyer’s lender to the seller. They may also require funds directly from the buyer. Once the funds are received in the settlement agent’s trust account, the settlement agent will complete the necessary paperwork to register the transfer of ownership with Landgate.
Step 8: Post-Settlement Matters
Following settlement, the settlement agent will ensure that the transfer of ownership is registered with Landgate. They will also attend to any post-settlement matters, such as notifying utility providers and local authorities, and following up and final rates adjustments.
The property settlement process in Western Australia involves several important steps and requires the expertise of a qualified settlement agent. From entering into a contract of sale to completing the transfer of ownership, each stage of the process requires careful attention to detail and adherence to legal requirements. Engaging the services of a professional settlement agent is crucial to ensuring a smooth and successful property settlement in Perth. By understanding the process and working together, buyers and sellers can navigate the complexities and achieve a satisfactory outcome in their real estate transactions.