What happens at settlement (and do I have to be there?)

When you buy a property, or complete a refinance, the final step is called ‘settlement’ and resembles something like a stock room floor with lots of yelling and milling around tables where cheques and certificates are exchanged. It’s all about you, but you’re not required to attend.

Settlement is quite literally when your purchase and your loan “settles”, that is the transfer into your name happens, or the switch of lenders.

At settlement of your home purchase your solicitor sends someone in with any cheques that they need to give from your deposit, your bank is there too, the solicitor for the seller is there and their bank is also there to be paid out and to hand over the certificate of title.

They all meet, check their lists, hand over bits and pieces and depart.

At settlement anyone selling a home is required to pay for the rates for the rest of the year, and the water bill, payout their lender and then provide a list of how they want the rest of their money spent – which may be their solicitor, real estate agent, a bit to themselves and a bit to Uncle Bill - if they so desire. Basically they can spend the money exactly as they like and you’re obliged to give them bank cheques for all of it (well in regards the rates they pay the full year and you have to pay them back for the portion of the year that you’re going to take it over for). The hardest bit is that these figures generally aren’t available until the day before, and even sometimes the actual day of settlement. You could get a call on the afternoon of the day before with a list of bank cheques you have to organize and get back to your solicitor before 9am. Unfortunately it’s out of their hands.

A better way, if you can, is to put your extra cash into an account with your new lender and give them authority to add it to the loan they have for you, or, send it to your solicitors trust account for them to work with.