Exchanging contracts is one of the main components of buying a property. Neither you nor the seller is legally bound to go ahead with the sale until a written contract is exchanged. This is just the first of a number of things to consider at settlement.
Two identical copies of the contract of sale are prepared, one for the purchaser and one for the vendor. Each party must sign their own copy of the contract of sale, and then they are exchanged.
The time between the exchange of contract and settlement can be anything between 30 to 125 days; however this can change or be negotiated with the vendor.
- Arrange the balance of the purchase price. This means ensuring your mortgage loan has been approved by the bank so you have sufficient funds at settlement.
- Ensure that your solicitor/conveyancer has prepared all the documentation that will be required to complete the purchase on the day of settlement.
- Ensure your solicitor/conveyancer has contacted the vendor’s legal representative to arrange the date, place and time of settlement.
- Ensure your solicitor/conveyancer contacts you prior to settlement with the exact date, time of settlement and the amount of funds that you are required to provide.
- It is also important to make sure the property is insured before settlement because some lenders may not lend you money unless the building is insured and evidence of insurance prior to settlement is provided.
- Ensure your solicitor/conveyancer has paid the balance of the purchase price at the time and place specified prior to settlement.
- After settlement, the vendor’s solicitor will contact the real estate agent that sold you the property and instruct them to release the keys of the property to you. This normally occurs after settlement on the same day.
- Your solicitor will contact you to confirm settlement has taken place. They will also send you a Statement of Adjustment to show you how the funds have been paid to all parties.
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13.Things to Consider at Settlement