Tips to avoid any money issues on the day of settlement

As a licensed Conveyancer, I work with hundreds of properties (and people) with the exchange of ownership and transferring of funds.

I have seen the pitfalls that can occur when purchasers are not diligent with their funds and do not ensure they have the correct amount in their account upon settlement.

Your conveyancer can guide you, but it is up to you to make sure you plan your finances correctly and have the correct funds in your account.

To help you plan for that day here are my 5 tips to having funds ready on your settlement date, ensuring that you are not short of funds.

1. Make sure that when you are borrowing money that your broker/banker includes the following in your loan amount or ensure that you have these funds available in your savings account on top of the purchase price:

• Stamp duty;
• Legal fees:
• Pest & Building fees;
• Strata Report fees;
• Title Insurance;
• Council/Water (approximately $2,000.00 + ); and
• Bank registration fees (approximately $500.00 +)

2. Ask your broker/banker to sign an authority to debit shortfall account. This means that the bank will be able to debit from your nominated bank account (provided that it is with the same bank). This will save you from running around the day before settlement to try and get cheques for settlement.

3. If you are a cash purchaser you can transfer approximate funds into your solicitors/conveyancers trust account well ahead of time and in stages. This will also save you time and money in running around the day before settlement to obtain cheques.

4. Ensure that you do not overspend – set yourself a budget. When at an auction and the bidding price keeps going up and up, don’t make emotional decisions. Make sure you have a budget. Over spending could mean that you will have to contribute more of your own savings into the property or if you lack savings then borrowing off family or friends.

5. If you are buying and selling and you are doing your budget, ensure that you add break costs for your discharging bank. If you have recently fixed your interest rate break costs can be quite expensive and people forget about break costs. Calling your existing bank ahead of time and questioning the break costs could be very beneficial for you. They may even have a deal if you buy and sell and use them as the incoming bank.

Christine McMurtire is a Licensed Conveyancer at Coutts Legal