From The Legal Beagle Team 20/12/2013

Whether you are a first home buyer or a high climber on the property ladder, buying a house is an exciting time.

From the time you arrive at that first open home until finally opening the door to your new house you will be caught up in a whirlwind of legal jargon and paperwork – this all leads up to Settlement Day. This is the day when, if everything goes to plan, money changes hands, you become registered as the owner of the property, and you get the keys to your new home.

Naturally, you will be feeling super excited on Settlement Day. From your end the day should run smoothly. Your lawyer, however, will be doing a lot of work to make sure that happens!

1. Firstly, the vendor’s lawyer will contact your lawyer to confirm that they are ready to go. This is called a ‘settlement undertaking.’
2. Next, your bank will deposit your home loan into your lawyer’s trust account – or, if you are paying for your house in full, you will deposit the full amount into your lawyer’s trust account.
3. Once your lawyer has received all the required funds and everything else is in order, your lawyer will transfer them to the vendor’s lawyer.
4. When this money has been received, the vendor’s lawyer will contact the real estate agent to authorise them to hand over the house keys or, in the case of a private sale, the vendor’s lawyer make the keys available for you to collect. In either situation, your lawyer will notify you that settlement has occurred and will give you details on where to collect the keys from.
5. After all of this your lawyer will be burying herself in paperwork! Important documents such as the Certificate of Title need to be updated so that you become the legally registered owner of the property. They will also be working on registering your bank’s mortgage on the property if you have one.
6. The vendor’s lawyer will notify all relevant Councils of the change of ownership and will provide them with your details as the new owner.
7. Once everything is complete your lawyer collects all the information gathered throughout the transaction as a record and sends it to you.

Phew - that’s a lot of action for just one day. Every now and then a slight hiccup may occur and settlement will be either slightly delayed or won’t occur on the day you expected – to lessen the chances of this happening make sure you have sorted out any finance arrangements with your bank or KiwiSaver at least a couple of weeks before Settlement. This way you can be certain the money will come through on time. 

Disclaimer: The information on this page is general information only and must not be relied on as legal advice. Legal Beagle is not a law firm or a substitute for a law firm. We are unable to provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defences, options, selection of legal documents or strategies.