Finance

What Happens After Signing The Contract?

July 23, 2020

Whether you are purchasing a property for the first time or it has been a while since you last purchased, here at Funding Force we want to always give our clients the most up to date information and make the process as stress free as possible.

So what we have done for you is explain the process from start to finish in a few dot points giving you a better understanding of what is involved.

Pay your house deposit

Paying your house deposit is normally in two stages. The first part deposit is called the holding deposit which is normally about one-thousand-dollar mark, paying that first deposit is paid upon the signing of the contract. During this stage of the sale, we call this a ‘conditional sale’.

The remaining balance of the deposit is paid prior to your ‘unconditional’ due date, this is when all the conditions have been met, if they have been mentioned on the agreement. If you are purchasing at auction, the sale is unconditional.

Get your home loan formally approved

When starting to look at purchasing you would speak to a lender to get preapproval so you know your borrowing capacity and spending limit.

If you have purchased ‘subject to finance’ after signing the contract you would then start the process of getting your loan formally approved to proceed with purchase. Once approved that is when you pay the remaining deposit.

Note: if you have or planning to purchase at auction, it is a requirement that you have already got a finance approval from a bank

Arrange a building inspection

A building inspection is very important as it looks at the overall structure of the property, any safety hazards that are present and also any major or minor defects. You are able to have listed on the contract ‘subject to building inspection’ which will give you the safety net should there be any issues that come from the building inspection. If you have not mentioned this on the contract, you will simply skip this step.

Final Inspection

Once you get to this point you know that settlement day is nearing. A final inspection is normally carried out 1 week prior to settlement, you should contact your agent to arrange a day and time that is suited. In the final inspection you check to see that the property is still in the same condition as when sold, also checking that all appliances that were in working order still are and to check that there has been no damage to the property. If there is any issues, it is important that you notify your conveyancer immediately.

Settlement Adjustment Fee’s

Prior to settlement your conveyancer will provide you with a settlement adjustment sheet with will calculate any current council and water rates as well as any allowances that may need to be paid to the vendor by you. It is always recommended that your put aside a few thousand dollars to cover the costs of the settlement adjustment fee’s and conveyancing fee’s.

Organise Insurance & Utilities

Prior to settlement it is important that you have organised building and contents insurance effective from the purchase date.

Day of Settlement

Settlement usually takes place anywhere between 30 and 90 days from the date the contract was signed, and the date was agreed upon. Your conveyancer will confirm with yourself and the agency what time settlement is booked in, and a time to collect the keys.

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