Settlement: Expectation vs Reality
Updated: Jun 20, 2019
We get that very few people really understand what it is that a conveyancer does. And honestly, we understand why, but this can cause some confusion about what settlement actually is.
Technically, it is the finalisation of the contract of sale and exchange of purchase funds. But that's a complete snooze, so let's talk about what it's actually like to settle your property or business.
It's pretty much the moment when you either get your house or business, or you get your money.
A good conveyancer, like all of the BKS team, will behave in a very duck-like manner with all the action being invisible from the outside while we madly bring it all together at the last minute!
In the old days (and we are talking less than a year
ago), two settlement agents or their clerks, any banks involved in the sale bit or the purchase bit of the transaction, and anyone else who has interest in the title, would meet in a weird room in Perth City and literally hand over documents and cheques. Cheques! Do you remember those?
One person physically checked the documents and deemed them error free (the smallest of errors could result in settlement being called off at the last minute, which is an extremely stressful situation for everyone). The cheques (!) were examined to ensure they were for the correct amount (and settlements were called off for incorrect CENTS), before settlement was declared complete. Your property was considered transferred and you could take possession. Or give possession, as the case may be.
A flurry of phone calls would follow to let buyers, sellers, real estate agents, managing agents, mortgage brokers, and strata managers know that the property had settled.
It was complete organised chaos with rooms full of outside clerks clamouring to complete settlement in the fifteen minute booking window before having to run up the terrace to the next appointment. Anyone unfamiliar with the process could be forgiven for being overwhelmed and concerned about the welfare of all involved.
I actually had a client insist on accompanying me to settlement once. His reaction was priceless!
The seller's cheque (!) would be banked and take three days to clear, and the Transfer of Land was later lodged with Landgate, the land registry. A couple of weeks later, the title would be registered. Again, provided all the info was correct on the document.
It was a long, slow process with huge uncertainty that it would actually happen. All of us had a slight moment of terror when the phone rang, just in case we were told of some insurmountable error. Of just that we would need to do a mad dash into the city with some missing document. I always felt for the regional agents...
Things have progressed slightly, and we now do things electronically, which means that we are much more in control of things in advance of settlement.
Document errors are now unheard of, generally, and funds are transferred into a seller's account pretty much straight away.
In most transactions, the transfer is also registered immediately, so the buyer will be able to proudly show off their name on the title.
To us, it's like a miracle!
To our clients, it should be too, because the new way is much less stressful than the old way.
We still have to do the chaos for more complex settlements though...