What happens on settlement date?
On settlement day, you need to pay the rest of the purchase price (the value of the house minus what you’ve already paid as a deposit). In most cases, the money will be coming from a bank or a mortgage lender. The lawyer will take care of drawing down your loan from the bank.
Your lawyer will also register the change of ownership from the vendor to you and register the lender’s mortgage on the title.
As the buyer, you have the right to inspect the property before the settlement date. This is to make sure there are no nasty surprises and ensure the house is in the same condition as when the agreement was declared unconditional. It’s in your best interests to do this, even if it seems like an inconvenience for you and the seller. It’s better to discover potential issues now than later on. You can arrange an inspection with your real estate agent.
What to check at a pre-settlement inspection
Organise an inspection a couple of days before settlement — try not to leave it any later. If you do discover any issues, it could take some time to get sorted. The following pre-settlement inspection checklist might help. Among the things to check for are:
- The property is in the same condition since the sale and purchase agreement was signed — i.e. there is no new damage.
- That the appliances and fixtures work properly.
- Chattels: The seller is obliged to leave light fittings, stove, floor coverings and other chattels on the chattels list within your sale and purchase agreement (such as alarm systems, heated towel rails). This inspection is your chance to check the chattels are there and in the same condition as when you signed the agreement.
- Vacant possession: Unless the property is being sold tenanted, the seller is required to give the purchaser vacant possession before settlement. It’s important to remember — if the house is tenanted, the tenants must have at least 48 hours’ notice of an inspection.
If you find problems with the property during your pre-settlement inspection, contact your lawyer straight away and get advice on the next steps.
Using your KiwiSaver savings is a great way to help you get into your first home quicker. Talk to an Adviser about joining or switching to the AMP KiwiSaver Scheme.