A LAWYER’S GUIDE TO A STRESS-FREE SETTLEMENT WHEN PURCHASING A HOME

Settlement day is mostly a legal process and is managed by your lawyer. Several things need to happen in sequence on settlement day between your lawyer, the Vendor’s lawyer, the Bank, and the Real Estate Agent.

We understand that settlement day can be stressful for the clients. But settlement day can be smooth and stress-free with proper planning. We have put together a guide for a stress-free settlement day and a successful transition into your new home:

Arrange financing in advance

If you are borrowing money to finance the purchase, you need to finalize your loan structure, interest rates, any KiwiSaver withdrawal and Kainga Ora loans well in advance of settlement day.

When you settle on the property, all the purchase funds must be in our trust account to enable a transfer of the money to the Vendor. Each bank and KiwiSaver provider have a different timeframe for the documents to be processed in order for us to receive the funds on settlement day. We manage these timeframes and advise if we need to alter the settlement day.

Certificate of Currency – House Insurance

House insurance is usually a condition of the property finance. The Bank is likely to require the insurance note the Bank as an interested party. Organize your insurance as early as you can, obtain a Certificate of Currency, and provide it to your lawyer.

Deposit personal contributions into the lawyer’s trust account in advance

In advance of settlement day, we will provide you with a reconciliation statement to show the personal funds needed to settle (if any). Make sure all your personal contribution funds are in our trust account, at least the day before settlement. Not having clients’ funds in our account can cause unnecessary delays.

Complete your pre-settlement inspection a few days before settlement

It is best practice to arrange to inspect the property a few days before settlement. If there are issues that you pick up in the pre-settlement inspection, this gives time to discuss and resolve them.

What to look for:

• Check that all the fixtures, fittings, and listed chattels are at the property and are in working order (unless otherwise agreed to in the Sale and Purchase contract).
• Check that the overall property and chattels are in the same condition as when you signed the Sale and Purchase agreement
• If the Vendor has agreed to complete any maintenance on the property before settlement, check that it has been done.

Arrange your utilities

Arrange for your utilities to your new home to be connected on settlement day or the day after. Ask the Vendor to hold off on disconnecting the utilities until after the pre-settlement inspection has been completed. This will ensure you can check the chattels are in good working order.

Communicate effectively with all the parties involved

Settlements involve a lot of moving parts – the bank, mortgage broker, lawyers, real estate agents, and even families! Effective communication is the key to holding this all together. Stay in the loop, respond promptly, and keep all the communication channels open.

Patience

Settlement can take place any time between 9 am and 4:00 pm. Plan for delays when organizing to move into your new home. Settlement might not be completed early in the day or might not go to plan. We always advise our clients to book a moving company or cleaners for the day after settlement.

Most settlements run as planned. However, if things go wrong, your lawyer is the first person to call. At Wakefields we are able to answer your questions and guide you. We can also help you negotiate with the Vendor to remedy any issues.

We hope this guide is a start to answering some of the questions you may have about settlement day.  For more information, check out our First Home Buyer’s Guide,  Brief Guide On Purchasing a Property , and our Comprehensive Guide on Buying & Selling Property on our website.

Contact the experienced team at Wakefield’s Lawyers today on (04) 970 3600 for your conveyancing enquiries.

• Elizabeth Hughes (Solicitor)