Settlement

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You’ve found a property.
The vendor has accepted your offer and you’ve paid a deposit, plus you’ve both signed the sale contracts. But you don’t get the keys until after settlement. 
Settlement is when you pay outstanding amounts to the vendor and the property title officially changes, making you the owner. 
The time between exchanging contracts and settlement day – the settlement period – varies by state. In NSW, it’s usually six weeks. In Queensland, 30 days is the norm and in Victoria it’s 30 to 90 days. The length can be varied but buyer and seller must both agree.
ACTION ITEMS
During the settlement period, you’ll finalise your finance. The lender will complete an independent valuation of the property and confirm the amount you can borrow. 
You’ll also have a chance to inspect the property again to ensure it’s in the same condition as when you agreed to the sale. 
Your solicitor or conveyancer will prepare the documentation needed on settlement day well in advance so it can be checked and you can sign in all the appropriate places. This step includes finalising council and water rates as well as any strata fees due up to settlement day. The vendor covers payments up to that time but you’ll take over from there. 
THE BIG DAY
On settlement day, your solicitor or conveyancer meets with the vendor’s settlement agent and a representative from your lender to hand over the paperwork and payment cheques. You don’t usually have to attend the meeting yourself. 
Your representative will let you know shortly after settlement has completed so you can collect the keys. They will also send you a statement showing how funds have been distributed.  
But things can go wrong. 
A document or a signature may be missing, for instance. If so, everyone works together to try to resolve the problem that day but sometimes settlement may need to be postponed. 
If you’re planning to move in straight away, be prepared for such a hold up. Leave a few hours after settlement before getting the removalists in and have a plan for alternative accommodation that night. 
Quick tip: You don’t take possession of the property until the paperwork and payment cheques have changed hands on settlement day. Hire a professional solicitor or conveyancer to handle the legal aspects and guide you through the process.
 
TO FIND OUT HOW RAMS CAN HELP EASE YOU THROUGH THE PROCESS, GET IN TOUCH WITH YOUR LOCAL RAMS HOME LOAN EXPERT OR DROP IN FOR YOUR <a href="https://ad.doubleclick.net/ddm/clk/297185933;124281690;p" target="_blank">FREE FIRST HOME BUYERS’ GUIDE</a>.
For more great property advice and tips on buying your first home from RAMS subscribe to <a href="https://ad.doubleclick.net/ddm/clk/297187184;124281691;q" target="_blank">The Great Australian Dream property series</a>.
For your free Property Observer eBook from RAMS, 12 tips for first-time buyers, covering everything you need to know when it comes to purchasing property, <a id="LPlnk632659" href="component/content/article?id=48727" target="_blank">click here</a>.
Disclaimer: Information in this material is general and does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. You should also obtain independent professional advice relevant to your financial circumstances.
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Managing the settlement

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<img src="https://counter.theconversation.edu.au/content/68982/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Informal settlements house around one-quarter of the world’s urban population. This means roughly 1 billion urban dwellers live in settlements that have emerged outside of the state’s control.
The Habitat III conference in Quito in October recognised informal settlements as a critical issue for sustainable urban development. But how did informal settlements come to make up such a large part of the world’s cities?
<h2>Resorting to informal housing</h2>
Rates of urbanisation can fluctuate rapidly and be hard to predict. This makes planning for urban growth a challenge, especially in developing countries, where more than 90% of urban growth is occurring. When data or government capacity is limited, housing shortages often result. 
With formal housing too expensive or unavailable, urban migrants must improvise. Many resort to informal housing.
Informal settlements are generally undocumented or hidden on official maps. This is because the state usually sees them as temporary or illegal. 
Over the past 50 years, governments have tried to deal with these areas in a number of ways. Strategies have included denial, tolerance, formalisation, demolition and displacement. 
While efforts to improve settlements and anticipate future ones are becoming more common, the desire for eradication persists in many cities. Forced evictions in various parts of the world are putting the rights of informal settlement dwellers at risk.
Over time, however, it has been recognised that poverty and inequality cannot be simply eradicated through demolition or eviction. In the developing world, one-third of the urban population now lives in slums. In Africa, the proportion is 62%. 
Many cities are looking for alternatives that formalise these areas through incremental, on-site upgrading. In addition to offering effective protection against forced evictions, it is critical to provide access to basic services, public facilities and inclusive public spaces.
We need to adopt integrated approaches that cut across urban scales and disciplines. These need to involve stakeholders from government, citizens and other organisations. Design thinking is essential in this process to meet the challenges of urbanisation.
<h2>The role of the New Urban Agenda</h2>
The Habitat III conference adopted a New Urban Agenda for the United Nations. This document presents a road map for sustainable urban development until Habitat IV in 2036.
While the quality of life for some informal settlement dwellers has improved over recent decades, growing inequality pushes more people into informal housing. As a result, the growth rate of informal settlements often outstrips upgrading processes. 
The UN Human Settlements Program (UN-Habitat) was one of the key agencies involved in Habitat III. Since Habitat II, UN-Habitat has worked extensively on housing and slum upgrading. The New Urban Agenda incorporates lessons from this process. 
An example is the need for innovative small investment models for informal housing and their inhabitants’ transport needs. The agenda also acknowledges the informal settlements located in hazard-prone areas. Their inhabitants often need more help with reducing the risks and building resilience. 
<h2>The way forward</h2>
Dealing with informal settlements is an issue of inequality. This inequality is both social and spatial in nature, across cities worldwide.
It is problematic that spatial thinking does not have a high profile in the New Urban Agenda. While urban design by itself cannot reduce social inequality and urban poverty, much can be learned from cutting-edge practices that integrate design thinking into upgrading informal settlements. 
One key lesson is that incremental housing (a step-by-step process of upgrading) can be a critical part of the solution. Incrementalism allows informal housing to be adapted over time. It also means community engagement is central to governments’ handling of informal settlements. 
Another learning is that evidence-based, multi-scale and multidisciplinary approaches are essential to tackle the challenges of informal settlements. Such integrated approaches intervene at multiple scales to provide a network of public open space and access to affordable public transport and facilities.
Most informal settlements – but for a few exceptions located in hazardous areas – need to be upgraded incrementally and on the same site.
<h2>Are we prepared?</h2>
When it comes to the critical role of design thinking in the process of urbanisation, built environment professionals need to be prepared to tackle the challenge of informal settlements. 
Incremental and on-site upgrading relies on a sophisticated understanding of informal settlement forms and adaptations. 
Universities have a key role in equipping future built environment professionals with the skills and knowledge needed to meet the real challenges of urbanisation. Informal settlements are here to stay. 
To better integrate these settlements into cities globally, they need to be recognised – politically, socially and spatially – and made visible through the gaze of mapping and research.
 
<a href="https://theconversation.com/profiles/hesam-kamalipour-288498" target="_blank">Hesam Kamalipour</a> is PhD candidate and research assistant in Urban Design, University of Melbourne.
<a href="https://theconversation.com/profiles/alexei-trundle-11956" target="_blank">Alexei Trundle</a> is PhD candidate, Australian-German Climate &amp; Energy College, University of Melbourne.
<a href="https://theconversation.com/profiles/andre-stephan-14991" target="_blank">André Stephan </a>is postdoctoral research fellow, University of Melbourne.
<a href="https://theconversation.com/profiles/hayley-henderson-288490" target="_blank">Hayley Henderson</a> is PhD candidate in Urban Planning, University of Melbourne.
<a href="https://theconversation.com/profiles/melanie-lowe-288493" target="_blank">Melanie Lowe</a> is research fellow, McCaughey VicHealth Community Wellbeing Unit, Melbourne School of Population and Global Health, University of Melbourne.
All are authors for The Conversation.
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When planning falls short: the challenges of informal settlements

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In property conveyancing, dates are essential terms in the contract.
Buyers and sellers regularly negotiate property settlement dates that work for them both.
And with just 80 days to Christmas, it is timely to consider how best to work around the calendar to secure a smooth sale.
Finding a private treaty buyer is taking around 40 days in Sydney, according to CoreLogic.
Then settlement typically takes place six weeks after contracts are exchanged, but this can be a point of discussion before the signature on the contract.
Whether it’s a sale by private treaty or by auction, once a contract has been signed, the settlement date is fixed.
A home purchase doesn't finish with signing the sales contract. In fact, the signing is the beginning of the most important process.
Of course, just because there's a date within the signed contract, doesn’t mean that the date isn't movable. But there could be consequences.
There are often issues that arise before actually taking possession of the property.
Around one in five property settlements in Australia is delayed by a median period of seven days, according to Property Exchange Australia (PEXA).
This delay has financial and emotional repercussions.
And the postponed settlements often create a knock on effect resulting in additional property settlement delays.
The proximity to Christmas, New Year and the school holidays heightens stress, so it warrants the earliest consideration of delayed settlement terms.
The seller and buyer need to agree to push back the move date before signing the contract.
I think it is actually a selling point to be flexible on settlements, possibly pushing the settlement well into 2019 as its offers the pre-Christmas buyer plenty of time to find the buyer of their home too.
Ofcourse, some buyers might have already sold and be keen for a quick settlement.
Either way, vendors need to be receptive to enhancing their sale prospects.
There will likely be some attendant issues, such as insurance, bank approvals, bridging finance and maybe deposit release.
Communication and common sense are needed in the formal and informal interactions between the buyer and seller, along with their estate agents, lenders and conveyancers.
I'm told Australia's most expensive house, Fairwater, which sold last month to tech entrepreneur Mike and Annie Cannon-Brookes ending the Fairfax family's 100 year plus hold on the exclusive beachfront, was done with delayed settlement terms.
They agreed on six month settlement terms.
Finding finance won't be an issue for the Atlassian billionaire, but vendors do need to be aware of looming problems if their buyer struggles to find purchasing funds in these straighten lending times.
On the formal front, in the event that a NSW purchaser is not in a position to settle on the settlement date, generally the vendor can charge penalty interest for each day that settlement is delayed and also issue a notice to complete, which gives the purchaser an additional 14 days to settle, thereby making time essential.
In the event that the purchaser is not able to settle by that date, the vendor may be able to terminate the contract and keep the purchaser’s deposit.
Changing minds isn't the go.
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Delayed settlement can boost the chances of finding the right buyer 

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Mortgage Choice has reported strong first quarter earnings, with home loan settlements up 8% year on year and cash group revenue growing 10% during the comparable period.
Financial planning revenue rose 75% year on year, while the head office generated home loan leads grew 46%.
“We have enjoyed a very solid start to the new financial year,” chief executive officer John Flavell said at the company's annual general meeting.
“Throughout the 2015 financial year, Mortgage Choice managed to record its strongest ever settlement result – up 10.6% on the previous year," he said. 
“We managed to grow our loan book by 4.6% to $49.5 billion.
"And, in the early part of this financial year, we took our loan book over the $50 billion milestone for the first time ever." 
Home loans worth $11.5 billion were settled throughout the course of the year, equating to nearly $1 billion a month.
Flavell said July was the company's second biggest month on record for home loan settlements, which boded well for the 2016 financial year.
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Mortgage Choice reports strong results, says loan book crossed $50 billion

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Receivers PPB Advisory are warning apartment developers to reduce their settlement risk.
Major developers are activating plans to deal with foreign buyers and local investors who may not be able to access funding levels from lenders they previously envisaged.
It follows on from banks who've introduced an APRA triggered lending crackdown.
"Developers need to understand and manage the risk of their purchasers' settlements," PPB Advisory's Garry McLean told The Australian Financial Review.
"They need to ask themselves some simple questions about the purchaser – can I locate them, where do they live, what is there capacity to settle, are they a cash buyer or will they be seeking finance, who is their financier?"
"A complete due diligence of their purchasers will assist developers to mitigate settlement risk in the residential developments nearing completion."
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He said it had been a major concern with many developments across the eastern seaboard due to be completed in the next few months.
"Developers should be undertaking a complete review of their existing pre-sale purchasers to mitigate their settlement risk – it's too late to wait until settlement day and realise purchasers are unable to complete due to limited financing sources for investment units."
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McLean suggested he didn't see the prospects as similar to the fallout on the Gold Coast market during the global financial crisis.
"This was a global meltdown," he said.
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Settlement risk warning from PPB Advisory

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<div id="toc">Settlement is the official process of legally transferring a property from one person to another. It is usually conducted by the legal and financial representatives - eg conveyancers, of both the buyer and the vendor. Settlement normally occurs between four and six weeks after both parties have signed the contract of sale. </div>
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The settlement date is included in the contract of sale and agreed to when you signed it. It is the date that: 
<ul>
<li>the balance of the purchase price is to be paid to the vendor </li>
<li>all relevant legal documents - eg memorandum of transfer, are completed and lodged with the appropriate agencies </li>
<li>the certificate of title is transferred into the buyer's name </li>
<li>the property is legally transferred to the buyer </li>
<li>the adjustments for rates and taxes are calculated.</li>
</ul>
Settlement is a complex legal process and it is strongly recommended that you engage the services of a professional conveyancer or solicitor to represent you.  The majority of settlements occur in the settlements room, a room provided by the Land Services Group which is open weekdays between 9.00 am and 5.00 pm. No booking is required.
<h2 id="title0">Documents required</h2>
Documents usually lodged, along with the necessary fees, with the Land Titles Office (LTO) after settlement includes: 
<ul>
<li>memorandum of transfer - to transfer the certificate of title from the vendor's name into the buyer's </li>
<li>memorandum of mortgage - the buyer's mortgage is registered on the property's certificate of title </li>
<li>discharge of mortgage - removes the vendor's mortgage from the certificate of title.</li>
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These documents are available online. Once these documents have been lodged, the LTO will advise all the relevant state and local government agencies of the transfer of ownership for rating and taxation purposes.
<h2 id="title1">Rates and taxes</h2>
Outgoings - eg rates and taxes, will be transferred from the vendor to the buyer. The vendor is responsible for rates up to and including the date of settlement. After settlement the buyer becomes responsible.
<h2 id="title2">Stamp duty</h2>
This is a Government tax calculated on the value of the property at the date of the contract of sale. This is usually payable at or before settlement. <a href="https://www.revenuesa.sa.gov.au/taxes-and-duties/stamp-duties" target="_blank">More information about stamp duty</a> can be found on the RevenueSA website.
<h2 id="title3">Grants</h2>
If you are buying a property and are eligible for any grants you can lodge your application with RevenueSA once settlement has been completed. If you are using a conveyancer they will complete and lodge these forms on your behalf.
<h2 id="title4">Taking possession</h2>
Once settlement has been completed the buyer can contact the vendor or their agent to negotiate a date to obtain the keys for the property. Any access to the property that is required before possession can be negotiated with the vendor or their agent.
<h2 id="title5">Withdrawing from the contract of sale</h2>
Once the contract of sale has been signed by both parties and the cooling off period has expired neither the buyer or the vendor can withdraw from the contract without legal repercussions - eg compensation may have to be paid.  Withdrawing from the legally binding contract of sale can be expensive and complex. It is strongly recommended that you seek independent legal advice before deciding to do so. The consequences of defaulting on the contract will be detailed in the contract of sale.
If you want more information <a href="https://www.sa.gov.au/topics/property-and-land/buying-a-home-or-property/property-contracts-finance-and-taxes/the-settlement-process" target="_blank">click here.</a>
 
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Settlement

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