Oct 24, 2009 6:49 pm
I have done a search and not found an appropriate topic for this so here goes.
What is the actual settlement process? This is just curiosity on my behalf. I know in general it is the transfer of title for a sum of money, but what are the actual steps taken during a basic, no problems settlement?
Re: Settlement Process.2
Oct 25, 2009 3:17 pm
It is relatively simple.
Once the loan is approved, the contracts of sale have been exchanged and settlement approaches then the solicitor / conveyancer for the vendor and the buyer liaise with each other to arrange settlement.
The vendor's solicitor will tell the purchaser's solicitor what cheques are to be made up. Note that if a house sells for say $100,000 and the buyer has paid a $10,000 deposit then this doesn't mean that the purchaser will hand over a $90,000 cheque to the vendor at settlement. The vendor may have a $50,000 loan to CBA and $2,000 owing to the local council and $500 to their solicitor. So generally several cheques are made up which total to the $90,000 remaining.
At settlement the solicitors meet and exchange cheques for the title of the property. If there is a lender for the buyer and seller then they will attend as well. The seller's lender will hand over the title in return for a cheque to repay the vendors loan. The purchasers lender will take the title and hold onto it until the loan is repaid.
The vendors solicitor will then tell the real estate agent to release the $10,000 deposit to the vendor and to hand over the keys to the buyer.
It is really quite simple, just very hard to explain! Your solicitor will take care of everything.
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