What does a settlement date mean?
When it comes to buying or selling a house, there are a number of stages that the buyer and seller have to go through before the sale is complete. The process entails main steps including establishing moving costs, searching for a property, making an offer, valuation, and signing contracts. One of the final phases of real estate is the settlement date, which the topic of this article. We will aim to unpack the preceding stages before the settlement date, and outline what the settlement date entails, as well as the process following settlement.
What comes before the settlement date?
Before the settlement date, the buyer has the chance to undertake a final inspection of the property so that they can ensure there are no damages to the property. This is usually undertaken either the day before or on the morning of the settlement. To arrange the inspection, the agent must be contacted. The seller is legally obliged to hand over the property in the same condition as when it was sold.
The buyer should ensure that all features of the house are in the same state as when the property was left. This includes appliances, structures, and locks. Buyers should check that all the work is finished and that the appliances have been installed and are fully functioning.
What is the settlement date?
The ‘settlement date’ refers to the day on which the seller’s solicitor is sent the funds to pay the purchase price and in return the seller’s solicitor sends the buyer’s solicitor the signed Disposition and the keys. Usually, the price is paid by bank transfer and the Disposition, and the keys are sent by post to make sure that they arrive as soon as possible in the morning.
When does settlement take place?
Settlement is usually completed in the morning. The buyer will be informed as soon as possible so that they know when to come to the office and collect the keys.
What about the owner of the property?
If the seller also happens to be moving out of the property on the same day, the buyer must wait for them to complete their move. Normally, the seller will have moved out by 1pm but this could also occur later.
What happens after settlement?
After settlement, your lender will draw down on your loan. In other words, they will debit the amount that they have paid from your loan account. From your position, you will then be responsible for paying land transfer duty or stamp duty, which is usually paid on the settlement date.
From a practical point of view, you should take meter readings and then contact the utility companies with those readings, so that it can be arranged for the utilities to be transferred into your name.
Overall, settlement date is an exciting time in real estate. We hope that this article has helped answer your questions about what this stage entails. To find out more about buying or selling property, check out some of the other articles by FastCash4Houses.