Overview
The Enhanced Settlement Summary (ESS) has been redesigned to reduce friction so that you can experience a simpler, more streamlined way to completing the financial settlement schedule.
As part of the redesign, you’ll notice a revamped interface that includes new features and panels. We have also introduced some calculations enabling practitioners and financial institutions to easily enter funds and complete the financial settlement schedule with more accuracy and less dependency. We have also streamlined some tasks to reduce manual data entry.
In this article, we’ve added a new ESS workflow that provides guidance on when financial tasks should be completed, and by which Workspace participant.
Please note, the timeframe in this ESS workflow should be used as a guide as it may be impacted by other factors.
ESS workflow
Steps
General ESS workflow
Five days from settlement
- Accept the proposed settlement date and time
- Enter & agree on the Balance due to Vendor amount
- Assign shortfall responsibility
- Enter loan proceeds
- Confirm accounts
Three days from settlement
One day from settlement
Day of settlement
1. Accept the proposed settlement date and time
Role: All
All parties are required to accept the settlement date and time.
- On the Settlement Summary tab, click Accept Settlement Time.
The settlement status changes from Pending to Accepted.
2. Enter the Balance due to Vendor amount
Role: Proprietor on Title and Incoming Proprietor
The Balance due to Vendor* is an agreed amount (between the Proprietor on Title and Incoming Proprietor) that the vendor will receive from the purchaser. This is calculated by purchase price, minus deposit paid, plus/minus net adjustments.
- On the Vendor Funds panel, one proprietor (either the Proprietor on Title and Incoming Proprietor) clicks Add.
The Balance due to Vendor section is highlighted in yellow to indicate that you can edit or update this section. - Type in a Balance due to Vendor amount then click Save.
This Balance due to Vendor status is automatically set to Pending Others until it is confirmed by the responding participant. - After the Balance due to Vendor amount has been entered by a participant, the responding participant can either agree to or edit this amount:
- To agree to this amount, click Confirm on the Balance due to Vendor amount confirmation dialog (if settlement is within 5 days).
- To edit this amount, click Edit and enter another amount.
This will prompt the first participant to review the updated amount and the Balance due to Vendor status is set to Pending Others until confirmed by the first participant.
3. Assign shortfall responsibility
Role: Incoming Mortgagee
The Incoming Mortgagee specifies who holds an authority to debit the Customer’s account for Purchaser’s Equity (shortfall).
- On the Transfer Indicators panel, specify who holds client authority:
- Yes: The Incoming Mortgagee holds client authority.
- No: The Incoming Mortgagee does not hold client authority.
- Optionally enter the last four-digits of the account that the shortfall will be drawn from.
4. Enter loan proceeds
Role: Incoming Mortgagee
- Enter the loan proceeds in the Sources view of the Financial Settlement Schedule after the loan documents have been received.
5. Confirm accounts
Role: Incoming Mortgagee and Mortgagee on Title
The Financial Institutions participants are required to confirm the shortfall and surplus accounts outside of PEXA:
- The Incoming Mortgagees confirms the shortfall account.
- For Mortgagees on Title confirms the surplus account.
6. Assign Vendor surplus responsibilities
Role: Proprietor on Title or Mortgagee on Title
- On the Transfer Indicators panel, click Assign to me to assign the responsibility for directing the vendor surplus to yourself.
7. Enter line items
Role: Proprietor on Title and Incoming Mortgagee
To enter payment destination line items:
- Select the Destinations or Payments and Adjustments tab.
- Click Add Destination.
- Add destination line items or add adjustments.
To enter source line items:
- Select the Sources tab.
- Click Add Source.
- Add source line items.
8. Complete purchaser funds
Role: Incoming Proprietor
Complete the purchaser funds to determine the Purchaser Funds Required to Settle amount, which is based on the agreed Balance Due to Vendor amount + Purchaser Payment Directions amount.
Depending on who holds client authority for shortfall, the Incoming Proprietor completes the purchaser line items:
Where the Incoming Mortgagee holds client authority for shortfall
- On the Purchaser Funds panel, click Ready for shortfall to complete the purchaser line items.
This notifies the Incoming Mortgagee that the Incoming Proprietor has entered their financial line items and the Incoming Mortgagee may now add or update the shortfall amount in their source line items (step 10).
Where the Incoming Mortgagee does not hold client authority for shortfall
- On the Purchaser Line Items panel, click Mark as complete to indicate you have completed the purchaser line items.
- On the Purchaser Funds panel, click Add as shortfall or Update shortfall to add/edit the shortfall amount.
Upon clicking, you’ll be taken to the Add/Edit Source line item entry where you can review or edit the pre-populated shortfall amount.
When the purchaser’s line items have been completed, the Purchaser funds required to settle will be the amount required by the Incoming Mortgagee.
9. Enter purchaser shortfall amount
Role: Incoming Mortgagee or Incoming Proprietor
Where the Incoming Mortgagee holds client authority for shortfall
Where the Incoming Mortgagee is providing the purchaser’s equity (shortfall), and the Incoming Proprietor has clicked Ready for shortfall, the Incoming Mortgagee may go ahead to confirm the proceeds:
- On the Purchaser Funds panel, click Add as shortfall or Update shortfall to add/edit the shortfall amount.
Upon clicking, they’ll be taken to the Add/Edit Source line item entry where they can review or edit the pre-populated shortfall amount.
Where the Incoming Mortgagee does not hold client authority for shortfall
- On the Purchaser Funds panel, the Incoming Proprietor clicks Add as shortfall or Update shortfall to add/edit the shortfall amount.
Upon clicking, you’ll be taken to the Add/Edit Source line item entry where you can review or edit the pre-populated shortfall amount.
10. Enter final loan payout figure
Role: Mortgagee on Title
- Enter the final loan payout figure in the Destinations view of the Financial Settlement Schedule.
11. Complete vendor funds
Role: Proprietor on Title
Complete the vendor line items where the Mortgagee on Title is directing the surplus funds; otherwise skip to the next step.
- On the Vendor Line Items panel, click Ready for surplus.
This indicates to the Mortgagee on Title that the Proprietor on Title has entered their financial line items.
12. Enter vendor surplus funds
Role: Proprietor on Title or Mortgagee on Title
The participant responsible for directing the surplus funds completes this step.
- On the Vendor Funds panel, click Add as vendor funds or Update vendor funds.
Upon clicking, they’ll be taken to the Add/Edit Destination line item entry where they can review or edit the pre-populated surplus amount.
13. Check funds are balanced
Role: Proprietor on Title and Incoming Proprietor.
- On the Settlement Summary tab, check that the Total Sources and Total Payment Direction amounts are balanced, and the funds balance bar is green.
14. Sign Financial Settlement Schedule
Role: All
- On the Settlement Summary screen, select Sign from the Actions cog.
- Click Sign.
*The term 'Balance due to Vendor' differs based on your jurisdiction:
- NSW—Amount due on Settlement
- VIC—Balance due to Vendor
- QLD—Balance due to Vendor
- SA—Balance due to Vendor by Purchaser
- WA—Balance due to effect Settlement
- ACT—Amount due to Seller