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 in the end 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.
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:
Pest & Building fees;
Strata Report fees;
Council/Water (approximately $2,000.00 + ); and
Bank registration fees (approximately $500.00 +)
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.
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.
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 have lack of savings
then borrowing off family or friends.
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 quiet
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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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