Property Q&A: What to expect between contract sign and settlement
15/11/2017 Monica Jiang, Property & Contracts Coordinator
So you’ve purchased an off the plan property. What’s next?
At The Hopkins Group, we make it our job to ensure the transition from signing a contract of sale through to settlement of your property is a smooth process.
However while we guide our clients through each consideration, if you’re a first time investor you might not know what to expect from the process or what questions to ask. Luckily, we have you covered with some common questions you may want answered.
How long is the time period between contract sign and settlement?
While this will vary slightly between properties, depending how far into construction you’ve purchased, typically clients purchasing off the plan property from us can expect a time-frame of between 12 – 18 months between signing the contract and settlement.
What communication can I expect during this time?
During this time you will receive a number of communication touch points from us. These include:
On a quarterly basis we will provide you with construction updates from the developers. These often include a brief description of progress made onsite, photos and an updated anticipated completion date.
These reports will be communicated to you via email, or occasionally by post.
Approximately three months prior to settlement we will contact you to inform you of your upcoming settlement and arrange a pre-settlement meeting with all relevant advisers at The Hopkins Group.
During this meeting, we will:
- discuss your pre-settlement inspection,
- discuss finance arrangements
- advise on the kinds of insurance to take out on the property,
- discuss the leasing and management of the property, and
- review the cash flow of the new property as it sits with your current financial circumstances and tax position.
Any questions you might have regarding the settlement of your property will be answered at this meeting.
If you chose to utilise our property management services, we will also send you the appropriate paperwork to complete including a key collection authority after this meeting.
How do I go about granting valuer access?
Your bank may require a valuation to be completed on the property prior to final approval of the loan. We will communicate the access details to you and your lenders, as they become available, so this can be arranged as soon as the apartment is ready.
What does the pre-settlement inspection involve?
The pre-settlement inspection is the exciting moment you get to walk through your investment property for the first time. But you won’t be alone at this inspection – we’ll be walking right behind you with a magnifying glass making sure all is in order.
In the event we find any defects, we report these to the builders who rectify these issues either prior to settlement or within a timely manner post settlement (as contracted). If you are engaging our property management services, we will also take advertising photos at this inspection.
It’s also worth noting that not all of our clients attend the pre-settlement inspection in person, as they may be interstate or unavailable to attend due to other commitments. But that’s okay! A member of our team will always attend on your behalf to ensure the property is finished to the level expected and to take photos, where necessary.
What happens if I want to use The Hopkins Group for the leasing and ongoing management of my investment property?
Leasing paperwork will be sent to you a month prior to settlement. If you would like to use our services and ensure the timely leasing of your property, it is important to return all documents promptly and accurately.
Assuming you have completed a leasing and managing authority with us, we will usually begin to advertise your property for lease 14 days prior to settlement.
How do I go about arranging window furnishings?
As part of our negotiated benefits, window furnishings are usually provided by the vendor. However this isn’t always possible; in situations where window furnishings are not supplied, we will source quotes and provide them to you for your consideration and approval. It is important to pay for and order these before settlement, to ensure they are installed prior to any tenants moving in.
What triggers a call for settlement?
To settle a property, the vendor must provide a
- Certificate of Occupancy, and
- Registered Title
Once these two documents have been provided to you, you will then have the time period set out in the contract to settle the property (usually 14 days).
What happens at settlement?
Your lawyer will attend with the vendor’s lawyer; there is no need for you to attend.
The lawyers will coordinate with the bank and calculate the amount required and have the funds ready to be distributed to the relevant parties.
You will be notified once settlement has been completed.
How do I collect keys?
Once settlement has been completed, our property management team will collect the keys on your behalf, provided you have signed and returned a key collection authority to us.
If we will be managing your property, we will keep these keys to provide to your tenants; otherwise, the keys will be available for you to collect from our office once they are available.
How do I obtain a depreciation schedule?
Usually provided by the developer, this is distributed within 90 days of settlement via email. If this has not been negotiated, we can provide a referral to obtain this report, on request.
Once you have this report, you will need to pass it onto your accountant to ensure you receive maximum tax benefits from your investment property.
As you can see, there are lots of things to consider once you’ve purchased an off the plan property. But don’t let this daunt you! With expert advice from The Hopkins Group, you can feel confident that we will provide you with the relevant information at each step of the process, to help you feel in control. If you have any other questions not answered in this blog, please feel free to reach out and contact one of our advisers today.
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