A loan organised, settlement stuffed

We visited Westpac at Eltham to talk to their loans officer about home loans and I went over my recent experiences with Mal at Belconnen. Who knows, a new enquiry with someone different might put something new on the plate for us to consider.

The loans officer we spoke with was hesitant to ‘step on his toes’ as she said, “he had progressed the loan,” which was interesting because I never said we’d be going with Westpac. In fact I had been open with Mal saying how I was shopping around, and would let him know my decision when I returned from Melbourne. The Eltham loans officer was very helpful, and explained the various options and how they might benefit or disadvantage us.

She couldn’t better or match Virgin’s rate, but came up with an alternative – a Premium Option loan. This loan did not have an offset facility but the extra amount beyond what we paid remained available for redraw; I presume this was the ‘limit’ that was available with our previous home loan.

It’s as well to confirm things. It does no harm and you might regret not checking later. We got word from Virgin Home Loans.

There was a letter waiting for us when we got back home after visiting the bank. It was from Virgin advising that a Rocket Repay Home Loan application had been approved. It was good to get it. We’ll go with Virgin rather than Westpac.

Later in the day, we also visited our conveyancer who was assisting in the sale of our Warrandyte property. There was some paperwork to be taken care of. Fay, our conveyancer, worked from her home and had set up an office there. Whatever works, I guess. Her office was on the way to one of our shopping centres, so it was convenient to call in there on the way.

Fay was an unusual person. She was quite an experience to work with. She seemed to know her job in so far as she always had an answer whenever requested, but we both found conversing with her to be an unusual experience. Most communication with her seldom flowed as a conversation does. Possibly, with her being in this industry for so long she had come across all or most questions people put to her. She had a disconcerting habit of not waiting until you had finished asking the question and would interrupt and begin offering you the answer before you had finished putting the question. On most occasions this okay, but sometimes she should have waited until the question was out there.

We passed across the documents she needed and sat waiting while she completed her work. I thought, given this opportunity, with the three of us together that I might ask about settlement. I was curious as to the procedures that might happen at settlement. I had various assumptions about what happens during these transactions. To me, settlement was when the deal is completed: the buyer (through their conveyancer) provides the money, and the seller (through their conveyancer) hands over the title and keys of the property, or something similar. I have a semi romantic image of people seated around a large mahogany table in a wood panelled room, with them carefully and systematically checking their documents and passing cheques around.

It’s probably nothing like that, but because the public seldom get to see what happens it has always been both a mystery and a curiosity to me. However, I didn’t get too far in my enquiry when we got side tracked onto a particular aspect of settlement. I’m glad I asked, and thank my lucky stars to have asked. My innocent little question was quite an eye opener, as it happened. I wonder why no one mentioned the problem to us.

It turned out that there will be a delay in transferring funds following the sale of our Warrandyte property to when they become available for the Canberra property. It seems that banks have set things up so that there is a three day delay in the funds transfer process. It doesn’t matter whether you have the cash in the bank, the technicalities of which are not clear to me, but the funds from the settlement of our Warrandyte house will not be available to purchase the Canberra house until three business days have passed. The settlement date of the Canberra house is the 19th June. The settlement date of the Warrandyte house was a few days earlier; insufficient time for the funds to be transferred.

Fay said this is not a problem when buying and selling within the same state because the bank cheque can be exchanged on the same day, but there is no way we can get the funds interstate during business hours, on the same day. She also said the funds could be deposited directly into our Canberra solicitor’s trust account, but they still wouldn’t have access to the money for three business days.

Apparently, funds sometime go astray during interstate transactions. Three days was considered by banks to be an appropriate time to ensure the funds went to the correct locations. If the funds went missing it could be investigated before settlement was scheduled. There is a certain cautious logic in that arrangement, but I wonder who gets the interest during those three days: oh, don’t tell me it’s the banks.

You would have thought the solicitors and conveyancers who were organising the sale and purchase for me would have been aware of this and attempted to avoid the problem. It wasn’t so long ago that the Canberra agent had asked if our Warrandyte settlement date could be shifted to match the Flynn settlement date, and this was done. This was no doubt at the Flynn owner’s request, the owner of Flynn is a solicitor who was doing his own conveyancing. Why didn't he know? So, how is this dilemma to be resolved?

One solution might be getting the settlement of the Canberra house put back a few days – I will ask B, our agent to make some enquiries to see if this can be done. Another solution may be to change settlement of the Warrandyte house forward three days. I don’t really want bridging money for some restriction the banks had imposed.

And I thought our problems were over when Deposit Power rang saying the Bond Certificate was in the mail.

I would have thought that a pair of conveyancers working for the same client would get together and work these things out. I would have thought that this was part of the service that I was paying them; to alleviate problems. They both knew I was buying/selling interstate. So why didn’t they offer advice that would help with the transaction rather than potentially stuffing it up. Aggh!