For most property vendors, settlement day marks the end of the long, tedious road towards selling a property. For some, it is just the beginning. Settlement delays, known in the industry as 'crashing', can take days or weeks to resolve, and can result in vendors and buyers suing each other to recoup the costs involved. According to Smart Property Investment Magazine, the most common cause of a crashed settlement is a failure on the buyer's part to arrange financing in time. While there isn't much a vendor can do to prevent this, there is a host of other reasons for delayed settlements that vendors should keep in mind. Here are three things that property vendors can do to help prevent delays in the sale of their property.
1. Keep in touch with your bank
If the property you are selling is under finance, a representative from your bank will be present at the settlement to hand over the title deed to the buyer's financier. According to PEXA, the organisation responsible for Australia's electronic settlements network, bank delays can hamper your chances of a successful transaction. Your bank will likely require you to complete a discharge authority some weeks in advance of the settlement date, but some banks are known to experience delays actioning these, so keep in touch with your bank throughout the process to ensure everything is moving along nicely.
2. Keep the property in tip-top shape
Buyers have the right to conduct a final inspection of the property within the week prior to settlement, and many take this opportunity to scour the property for damage they missed during previous inspections. Buyers typically cannot take action against a vendor for minor scuff marks or 'wear and tear', but according to Consumer Affairs Victoria, major damages may motivate a suitably incensed buyer to delay settlement.
3. Check your paperwork carefully
Another common reason for a crashed settlement is missing or incorrectly signed paperwork. It might seem like there are reams of similar documents to sign when executing a property sale, but rest assured, signing each form is essential for ensuring your settlement goes through on time. You might, for example, think upon first glance that two copies of the Transfer of Land form have been issued to you in error, when in reality, two copies are in fact required. Don't risk a crashed settlement by neglecting to sign or initial everything you are asked.
Property sales can be complicated affairs, but by taking these precautionary steps, you can greatly reduce your chances of experiencing a crashed settlement and all the associated headaches.