Agents can help avoid expensive delays in settlement by clarifying the intentions of their buyers in relation to finance prior to submitting an offer to the seller.

During the course of a recent settlement, the buyers decided to shop around for the best finance deal as part of the finance approval process. After finding out that refinancing could save thousands over the course of their loan they decided to switch to another bank.

As expected the new bank gave them plenty of assurances that the refinance could be achieved in time for settlement. It soon became evident this would not be the case. Unfortunately, a series of bank errors that included lost paperwork and miscommunication resulted in a settlement delay of over two weeks.

While this delay was entirely the bank’s doing it caused the purchaser a great deal of anxiety. Despite being keen to move into the property the buyers were forced to sit and wait while the bank rectified their mistakes.

The seller was clearly distraught. They had accepted an offer based on an anticipated settlement date and now had little choice but to wait while the buyer waited for the bank. When the property finally settled, the purchasers had a penalty interest bill of over $2000. Fortunately for the buyer the bank undertook to reimburse the buyer.

There are a number of lessons here for agents to help avoid these problems:

Keep your settlement agent in the loop. A problem shared is a problem halved.

About the Author

Peter Fletcher

Peter began his real estate career in 1985 selling tin shacks and red dirt in Kalgoorlie. Moving to Perth in 1989 he quickly moved into agency ownership. By 2006, Peter had built a thriving agency managing over 600 rental properties. He then sold the business, taking time out of the industry to complete Honours in a Bachelor of Arts. Peter is now the Managing Director of Residential Settlements in Burswood and an active Army reservist. Peter has had just one hot shower since the 10th of May 2008.