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Delayed Settlement... Ugh...

Discussion in 'The Buying & Selling Process' started by norwoodman, 2nd Jun, 2016.

  1. norwoodman

    norwoodman Well-Known Member

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    Thought I'd quickly share an ongoing experience I'm facing with delayed settlement at the moment and some learnings for others about to exchange contracts (this shouldn't be anything new for the regulars).

    Exchanged contracts just over a month ago on a property in Queensland with a 30 day settlement, subject to building and pest and finance approval to be met 14 days after exchange of contract. Loan application via mortgage broker to one of the 4 majors followed shortly after exchange of contracts.

    Bank was super slow to assess and approve the loan, which required an extension of finance approval by one business day. Already behind the eight ball, the documents required to be signed and returned to the bank took a whole week to arrive in the mail from when they were originally sent, arriving exactly one week before settlement was due.

    By this point there was no chance of settling on time. Had to resubmit some documentation by express post due to an error on my part on the day of settlement and still waiting for settlement to occur due to delays in the bank verifying documentation again.

    Default interest still increasing as the delays go on, fortunately the vendor hasn't decided to terminate and take the deposit due to the delays.

    Moral of the story is this: Don't waste any time getting documentation in order once contracts have exchanged and make sure everything has been completed correctly.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    CBA?
     
  3. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

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    Or get a pre-approval inplace before signing, less stress :)
     
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  4. Redom

    Redom Mortgage Broker Business Member

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    I suspect this is CBA too - sounds like an all to common story at the moment.

    Pre-approval with CBA won't do much use i don't think - its a computer based approval process, doesn't really tell you all that much and will still take nearly as long for the approval to happen (unless referred for manual assessment). Could be valuable with a lender like NAB where credit review it like a full application.

    Sometimes can work against you, given they give you a nice flashy document for customers to work off quickly without anyone actually reviewing it (i get a number of enquiries from frustrated customers walking away from their bankers/brokers because they assumed that flashy document was an undertaking).

    Some potential finance process notes for others:
    • For shorter term settlements, you may need to stick to lenders that don't have 5+ business day turnarounds and archaic re-assessment processes.
    • Work on e-docs, saves 1 week in postage.
    • Escalate where you can - you can escalate certifications, but more difficult to do with credit.
    • Potentially discuss settlement terms with the broker first before finalising contract offer.
    • Perhaps put in a clause to allow 1-2 week extension to settlement without penalty interest (subject to negotiation process).
     
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  5. MsAli

    MsAli Well-Known Member Premium Member

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    This. Our solicitor mentioned the banks have been really slow and to ask for a 42 days settlement in Queensland right now.
     
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  6. Tonibell

    Tonibell Well-Known Member

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    Just been through something similar ourselves - but without such an accommodating vendor.

    Definitely need to have your house in order these days.
     
  7. Perthguy

    Perthguy Well-Known Member

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    For a refinance, so no time pressure, my Bank's Settlement Solicitors prepared three complete sets of documents to sign due to various errors on their part. I dropped them off personally at the Solictor's office, which saved some time but the whole process still took 2 months. I would not like to do the same under the time pressure of a settlement deadline. With timeframes that tight, it would worth asking if you could pick up and deliver documents personally, assuming you are near the office of the organisation preparing the paperwork.

    I am having issues with my own settlement now as a buyer, with the sellers bank holding up the process.
     
  8. Bayview

    Bayview Well-Known Member

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    Only for this quarter; next quarter it will someone else's turn. :po_O:eek:

    They're all the same - with different logos.
     
  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It's a good point.

    Their service levels will improve over time (they're starting to get better) - and another lender will come in, undercut the market, pick up a whole lot of new biz and have their time-frames blow out.

    Sounds frustrating though @norwoodman - hopefully it's all sorted out soon.

    Cheers

    Jamie
     
  10. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

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    I request a manual referal on all my pre-approvals with CBA :)
     
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Thats how it works!
     
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  12. norwoodman

    norwoodman Well-Known Member

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    Looks like my story for settlement is finally about to end with an old school style time deadline and running around with a bank cheque...
     
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  13. Perthguy

    Perthguy Well-Known Member

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    That's great news! :)

    I just found out mine might not happen at all. Apparently the sellers bank has some kind of guarentee over the property I am trying to buy. If the seller can't satisfy the bank, the bank won't release the title and it won't settle. I'll be dissapointed more than anything because this property has a lot of potential and I would hate for it to slip through my fingers.