If you’re buying a property, at settlement you are obligated to pay the seller the adjusted settlement price. For settlements that are not conducted electronically, this is done by handing over a set of cheques made payable according to the seller’s directions, and most of these have to be bank cheques.
There are two scenarios:
1. Your lender is only providing the loan funds. In most cases your lender will deduct stamp duty and other fees from the loan, leaving a lesser amount actually being provided at settlement. You will need to make up the shortfall by delivering one or more cheques to Glenferrie Conveyancing. Alternatively, you can deposit the shortfall funds into our Trust Account. If you need to provide shortfall funds for a settlement that is being conducted electronically, then the funds must be deposited into our Trust Account.
2. You have a savings account with your lender, and you have granted your lender authority to access these funds. In this case, the lender will provide all of the money that is required for settlement (i.e. the money being loaned plus your shortfall funds).
You will need to deliver one or more cheques to Glenferrie Conveyancing. Alternatively, you can deposit the required funds into our Trust Account.
Most commonly, these are amounts that the buyer compensates the seller for the buyer’s share of the periodic outgoings for the property that the seller has already paid or will pay at settlement. The buyer’s share is calculated for each outgoing on the basis that the seller is only liable for the outgoing up to and including the day of settlement.
If a periodic outgoing (i.e. Council rate, Water rate, Land Tax, Owners Corporation fee) is unpaid before settlement, then it will be paid at settlement out of the total pool of settlement money.
For more information, please contact Glenferrie Conveyancing.