The 5 Step Closing Process for Finalising a Sale
Finding and buying a home involves all sorts of things from research to inspections, negotiations, offers and a lot more. But once you and seller come to an agreement - what happens then? Here are the 5 steps to finally closing the deal on a home.
1. Buyer - Securing Your Property
After the seller accepts your offer, their agent will ask you for a holding deposit to make sure that you’re serious about purchasing the property. Holding deposits are refundable, in case the seller changes their mind.
A word to the wise: use this time period to show your solicitor or conveyancer the contracts. Holding deposits are only verbal and non-binding agreements. If the seller decides to sell the property to another buyer, not only could you lose money; you’re also back to square one.
2. Seller - Closing the Deal
In this step, the seller will need to sign the contracts of sale, exchange them and pay a deposit. This will make your agreement legally binding. After this, you are the new owner of the property. It depends on your agreement how much deposit you will pay.
Under a conditional exchange, you need to pay a deposit of 0.25% to 10%. You will also have a five-day cooling period, usually used to conduct inspections and get unconditional approval from your lender. You can also use this time period to rescind the contract if you ever change your mind, or the inspection results are unfavourable or you did not get unconditional approval—however, you need to pay a penalty of 0.25% of the purchase price.
3. The Legal Process Starts
After closing the deal, you start with the legal process of transferring the property to your name—also known as conveyancing. Get the help of a solicitor or conveyancer for your protection. Aside from transferring the property to your name, conveyancing also covers the examination and exchange of the contract of sale, building and pest inspections. This might cost you around $1,000.
We’re nearing the finish line, finally! Settlement period happens between 1 to 3 months after the contract exchange. In this time, you will pay the balance of the purchase price to officially own the house. The certificate of title will stay with your lender until the mortgage is paid.
Tip: Arrange another inspection to ensure that the property is in the same condition and all of the stipulations of the contract are followed by the seller.
5. Welcome to Your New Home!
Once all of that is done, you can now move in and enjoy life in your new home. Congratulations!
And that’s how the closing process goes! Got any more questions or concerns? Let me know and I’d be happy to help.