Confirming funds required to settle | Help Centre

[Saysa]

When processing a settlement that includes a transfer, Incoming Proprietors can now use the Funds Confirmation panel to specify how much money is required for settlement. This feature improves clarity and transparency around how much money is required for settlement in the period leading up to settlement.

This amount, agreed to by both the Incoming Proprietor and Proprietor on Title, represents the total funds required from the Incoming Proprietor to complete the transaction, and includes the adjusted balance of the purchase price, lodgement fees, stamp duty, incoming proprietor’s PEXA fees, and incoming proprietor’s professional fees. You should not separately add the destination funds of the Proprietor on Title (as these already form part of the adjusted balance of the purchase price). Where the Incoming Mortgagee has authority to debit the purchaser’s account, it can then use this value to confirm how much is required for source funds.

Note: This feature is available only for Workspaces that includes a Transfer.

Specifying total funds required to settle

1. Create or open a Workspace that includes a Transfer:
1. Log into a Workspace as an Incoming Proprietor.
2. Click Settlement to open the Financial Settlement Schedule screen.

   By default, the Settlement Summary tab is selected, and a Funds Confirmation panel is displayed.

   Note: This panel appears only in Workspaces that contain a Transfer document.

2. Specify the Funds required to settle amount:
1. On the Funds Confirmation panel, click Add to enter a new amount, or Edit to change an existing amount.
2. Enter the amount that is required to settle the transaction.
   Note: Include the total funds required from the Incoming Proprietor such as the adjusted balance of the purchase price, lodgement fees, stamp duty, incoming proprietor’s PEXA fees, and incoming proprietor’s professional fees. You should not separately add the destination funds of the Proprietor on Title (as these already form part of the adjusted balance of the purchase price). 
3. Save the changes.

An email is sent to the Incoming Mortgagee notifying them that an amount has been entered for the total funds required to settle.

Client Authority to provide shortfall

Where a settlement shortfall applies, the Incoming Mortgagee can specify whether they have the authority to draw the shortfall amount from the Incoming Proprietor’s account and provide it source funds.

• Yes – the Incoming Mortgagee holds Client Authority

  The Incoming Mortgagee will cater for shortfall funds in their source line items. In addition, the Incoming Mortgagee can optionally enter the last four digits of the account that the shortfall will be drawn from.

• No – the Incoming Mortgagee does not hold Client Authority

  If there is a shortfall in the settlement, then the Incoming Proprietor must resolve how they are going to provide the shortfall into the transaction by coordinating with their client.

[goolwaconveyancing]

When there is an incoming mortgage - are we required to include

1. the lodgement fee for the Mortgage on Title discharge and

2. the Incoming Mortgage lodgement fee 

or keep it to just the funds required for the Transfer..

* I am in South Australia 

[Marty]

Hi @goolwaconveyancing,

It should be all the funds required to settle the transaction, so please include the discharge and mortgage lodgement fees in the figure you enter.

We've added help text to assist users:

Total funds, as agreed by both the Incoming Proprietor and Proprietor on Title. Includes the adjusted balance of purchase price, all registration fees, stamp duty, PEXA fees and professional fees.

Thanks,

Martin

[goolwaconveyancing]

Thanks Martin - I found ? and hovered and realised. 

[TheDoctor]

As an Incoming Mortgagee, I love this new feature. We used to have to use Conversations which are often not responded to.

A couple of questions though.

Is it simple enough to amend the funds required amount?

Will the Incoming Mortgagee receive a new notification if the amount is amended?

[Marty]

Hi @TheDoctor,

Glad you find it useful.

Yes, the Incomining Proprietor can amend this amount at any time prior to settlement.

Here is what they see:

And yes, the Incoming Mortgagee will receive a notification when the amount is amended. This notification will include the following text:

[Subscriber name] has updated the Total Funds Required to Settle, please review your source financial line items.

We've received further feedback for this functionality that we plan to address in the coming releases, such as capturing the loan amount, updating the help text etc.

Thanks,

Martin

[TheDoctor]

Excellent, thanks Martin

[MarcusLiley]

Just want to clarify the intention (and bank's understanding) of what this figure should be.

Take the following simplified example:

• Adjusted balance of purchase price, all registration fees, stamp duty, PEXA fees and professional fees = $100k.
• $5k source added by PoT because they are holding deposit less commission
• $2k source added by IP because buyer gave them  equity.

Is the funds required to settle:

1. $100K (the "Total funds" required) and the IM is expected to allow for the $7k sources, OR
2. $93k, the amount required from the IM

[TheDoctor]

Hi @MarcusLiley,

We have always understood this field to be the all inclusive total of funds required at settlement.

It should be the amount which will eventually total the Destinations tab.

So it should be regardless of all sources of funds and include the government rego. It should not include any PEXA fees unless these are being addressed in the settlement figure.

So, in your example, it should be $100k.

If there are some source funds coming from PoT and/or IP, this can be advised via Conversation.

hope this helps