During the settlement period stay in regular contact with your lender, solicitor, and the real estate agent to make sure you are on track for the settlement date (the day where all parties exchange the money and Contract of Sale for the property).
Call your lender, solicitor and agent for regular updates. Don’t expect them to call you—they won’t; and they will make decisions on your behalf without first consulting with you. Call them anyway.
This happened to us on both of our property purchases.
What we learnt buying our first property
A couple of days before we were meant to settle I called our lender and they told me we had to push the settlement date back (by a few days or a week).
Now, if ever you have to push the settlement date back, you get hit with lots of fees. And this adds up to a lot of money. You get charged for every single day you are over the original settlement date.
Our motto was to never, under any circumstances push back the settlement date on our side. If the other party must push back, then that is their issue; but on your side, don’t do it if you can help it.
When we were told we had to push the settlement date back on our first property I asked why (trying to figure out what had happened).
At the time we purchased there was a $7,000 government incentive for buying under $500k; the problem was that this $7,000 was not going to be available before the settlement date. In the meantime, our solicitor assumed we wouldn’t have the $7,000 to cover the costs that the government grant was originally going to cover so our solicitor called for the settlement date to be pushed back; without consulting us first.
Nobody consulted with us, nobody called us, nobody communicated with us in any way. Nobody even told us that there was a new settlement date planned. It was only because I called the lender. Nobody told us until we asked questions and nobody consulted with us about this issue. And yet they made these decisions on our behalf.
We did have the $7,000 shortfall so we pushed forward to settle regardless of the decisions made on our behalf and we ended up settling on the original settlement date. Remember when we talked about having a buffer; this is for that reason.
On the same property, another issue we faced to potentially push back the settlement date was that the vendor (person selling the property to us) also pushed back the settlement date. A couple of days before settlement date the vendor wanted to move the settlement period back because they couldn’t move the rental furniture out in time for settlement.
However, if you are ready on settlement date, you are allowed to move in; even if the vendor is not ready.
You can still move into the property on the original settlement date, even if the vendor pushes the settlement date back (you have every right to, if you have moved mountains to meet your settlement date, then you shouldn’t have to wear any costs associated, and that includes paying for extra rent elsewhere).
The vendor moved the rental furniture out and we settled on the original settlement date.
If for any reason the vendor needs to move the settlement date back, then let them. They will wear the associated costs, not you; and you can still move in.
If for any reason you are told by your solicitor, lender, or the agent that you need to push back settlement on your side, then move mountains to make settlement happen. You don’t need those extra costs.
What we learnt buying our second property
On our second property, two days before settlement date I was told that our solicitor didn’t have all the paperwork. I spent a full day (with a double pram and two young children in tow) running from one place in the city to another—calling people, paying for documents, organising for this last piece of paperwork to come through—and by the end of the day I had it.
I moved mountains that day to make it happen. Other people are not concerned if your property purchase doesn’t go ahead on the day it is supposed to. And why would they? They are not hit with all of the fees—you are!
I didn’t wait for someone else to do it, it would have been too late and we would have had to pay all those additional fees.
I went and fetched documents myself.
I went above and beyond my own role to get what we needed. You have to do whatever you need to do to make it happen.
Within the last five business days before settlement be prepared to go above and beyond if you need to. If you have to, physically go and pick up and pay for any necessary documents that you need; even if they are hundreds of dollars, even if you have kids in tow, even if it’s raining, even if it’s hours away, even if it’s the day before settlement.
Do everything you can to settle on settlement date.
And during the process, keep calling your solicitor, lender and agent to get regular updates. If you don’t, you could be settling after the original settlement date—and then you will literally be paying for it.
This wraps up the buying section of this book. Up next we talk about how to manage your home loan.