What the banks have to do before settlement

You probably got unconditional loan approval and a valuation before you exchanged. At least I hope you did! Please tell me you did. But that’s just the first step as far as the banks are concerned.

If you need a mortgage, they need to receive and process all the loan documents so they can make funds available. A large part of your solicitor’s job is to ensure that the lender has all the information they need. That includes checking and/or witnessing mortgage documentation.

If the seller has a mortgage on the house, that mortgage needs to be lifted before they can pass the title to you. So their bank also has to process a lot of paperwork.

I’ve had transactions before where the seller owns the house without a mortgage, and the buyer is buying without a mortgage. In that case, settlement could happen in 48 hours from exchange. But obviously that’s very rare!

What you have to do before settlement

You’ll also need to:

• Arrange a pre-settlement inspection. This gives you a chance to make sure that everything is in working order, none of the included items have been removed and there aren’t any discrepancies.
• Arrange building and contents insurance if you haven’t done this already.  We’ve already talked about how important it is to have this in place asap.

Your solicitor needs to:

• Check that the details of the property are correct as shown on the plan attached to the contract
• Check that rates and utilities are up to date
• Prepare the adjustment statement, which ‘adjusts’ the amount you and the seller pay towards rates and utilities
• Prepare or check the documents to transfer legal title into your name
• Arranging with you and your lender to provide settlement funds
• Doing a title search to check that the seller can provide you with free and clear title at settlement

What the agent has to do before settlement

The selling agent spends this time liaising with all relevant parties – solicitors on both sides, lender, buyer and vendor – to make sure everything is travelling the way it should. They’re also going to arrange any maintenance or repairs that came up in the pre-exchange inspection and they’ll ensure all inclusions are per the contract.

Legally, it’s possible to change the settlement date if both parties agree. In practice, though, you’re dealing with four parties: your bank, their bank, your solicitor and their solicitor. All of you would have to commit to the new date.

My advice? It’s better to give yourself enough time to get ready for settlement now, than to move up the date and then scramble to get everything done.