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Some people argue that buying a property is the most stressful part of the investment journey.
But some find the property settlement process when the property is legally transferred from one party to another, a harrowing time.
You have to rely on a team of conveyancers or solicitors, your finance broker, and your property manager to get you through this chaotic time, and there are a lot of balls in the air!
But, hopefully, you have chosen your team well and you will be making money from your investment in no time.
Here is a rough guide on how to prepare, and what to expect:
1. Line up your financial ducks
A proficient finance broker will guide you through all of the bank paperwork to obtain a finance pre-approval (which allows you to bid at auctions and make offers that are not subject to finance).
Then when you purchase your property, act quickly to sign and return all of your documents so there will be no delays with the settlement.
Ask your solicitor or conveyancer how much money you will need in your account to ensure the correct funds can be drawn by the bank.
Don’t do the maths yourself, no matter how accurate you are with numbers.
Most contracts of sale include penalties for settlement delays caused by the buyer, so allow plenty of time to get the required witness signatures and documents signed.
2. Organise an inspection
If you’re buying a house, it doesn’t matter if the home is near-new, it is worth organizing a building and pest inspection to ensure the property you are buying is in good condition.
If you haven’t managed to organize this prior to signing the contract, make your offer subject to the successful outcome of a building and pest inspection.
No home is perfect – except some minor problems.
But if your inspection turns up an active termite infestation, then you would want to use the clause in the contract to pull out of the sale.
Your conveyancer should be methodical and an excellent communicator.
It’s up to them to notify council and water authorities in relation to settling final bills, and they must also liaise with your broker or bank regularly to ensure all of the documentation and approvals are progressing.
I prefer using a solicitor to a conveyancer – it’s good to have them on your side when things go wrong – and believe me they do.
You’ll also be entitled to a final inspection in the days leading up to settlement and you should use this time to ensure the property is in the same condition as when you bought it.
Come settlement day, your conveyancer and your lender meet the seller’s representatives in person.
Once all the documents are signed by both parties, they are sent to the titles office to register you as the new owner of the property.
This process is slowly but surely being replaced by electronic conveyancing, but at present most settlements occur the old-fashioned way.
Time to pop the champagne!
4. Hire a good property manager
Engage a good property manager to protect your asset.
You deserve a property manager who cares as much about your property as you do.
At Metropole help you build your wealth by offering you the best property management services available because we are a different breed of licensed estate agents.
We do not sell real estate.
We lease and manage residential properties throughout Melbourne and Sydney and Brisbane and concentrate all our resources on ensuring that your specific management needs are fulfilled.
This means we will look after your property the way we look after our own, using our professional skills and the latest technology to find quality tenants, minimise vacancies and handle marketing, repairs, maintenance, accounting, and legal compliance efficiently and cost-effectively.
... and the real benefit is a generally better return on your investments with minimum fuss and more peace of mind.
Click here now and find out more about how Metropole can help you maximize your investment returns through our specialist property management services.
Finally, don’t forget to take out the landlord’s insurance in case the tenant breaks the lease or causes extensive damages.
It only costs a few hundred dollars a year, and the peace of mind is priceless.
So, you can see that there are many things that need to come together during the settlement phase.
But if you keep up your end of the bargain by signing and organising documentation quickly, and you hire experienced professionals to help you out, it should be smooth sailing!
ALSO READ: 10 Things every landlord wishes tenants knew