The essential guide to a stress-free settlement

Deal with caveats and encumbrances early

A major cause of anxiety that can cause settlements to be delayed are undetected legal caveats and/or encumbrances on a property. These must be legally lifted before you can settle.

Ideally, you should aim to buy a property with no caveats or encumbrances upon it in the first place – you can uncover these by instructing your solicitor or conveyancer to carry out a title search prior to purchase, or at the very least before the contract goes unconditional. If anything crops up, your solicitor/conveyancer should instruct the seller’s legal counsel to resolve the issues – or you can simply walk away from the purchase if you prefer.

Make sure the money is in place

One of the most common reasons for settlements being delayed or failing altogether is the funding not coming through. Mortgage approval is usually dependent on the bank’s valuation of the property, which may not take place until late in the buying process. If the valuation falls short, you could be in big trouble.

Results Mentoring property coach and experienced property investor Brendan Kelly says you should make finalising your funding your top priority after signing the contract of sale.

“If you’re on a standard settlement of between 30 and 90 days, get your loan approved once you’ve signed the contract or gone unconditional,” says Kelly. “Make sure it’s all done well in advance of settlement.”

Even better, choose a bank that will pre-approve your loan or accept your evaluation. A mortgage broker can help you find a lender who will do this, as well as help you find the best loan for your circumstances.

Be proactive as D-day approaches

You may have a great conveyancer or solicitor, and the bank may have approved your loan, but you should also take responsibility for ensuring the settlement goes ahead as planned. You should be proactive, albeit not pushy, in ensuring that things are progressing well as settlement date approaches.

Kelly recommends chasing up your conveyancer/solicitor, your bank/mortgage broker and the vendor’s solicitor or real estate agent between seven and 10 days before the appointed settlement date.

“Call, don’t email, the key players, and ask the following questions,” says Kelly.

• Is everything on track for settlement on [this date]?
• Is there anything that is missing that could stop settlement?
• Is there anything you need me to do/anything I can do to help?

“Follow up your calls with emails confirming the conversations. That way, if there are any problems, you have evidence that you’ve ‘done your part’,” he adds. “This also helps counter any demands for additional funding or payments from your end if things go wrong.”

Kelly adds that you should repeat this process three days out from settlement as a final check. The day before or on settlement day is often too late to resolve any problems and settle on time.

Proactive preparation should mean your settlement goes smoothly, but don’t panic if it still doesn’t go to plan. There’s usually a grace period to resolve any problems, and nine times out of 10 all the parties involved will pull out all the stops to make sure settlement goes ahead within a few days.