The legal process

I am curious to know... exactly what happens at settlement when a mortgage is involved?
I think my pea sized noggin can follow the idea of a contract between buyer and seller (or mortgage provider and buyer), but what legal documents are prepared and who are they held by when a mortgage is involved?
Exactly how does a bank have security for their loan without their name on the title?

Go and watch a settlement, many occur at the office of state revenue at the city.

Basically 3-4 people stand around a small table.

You'll have two conveyancing representatives (vendor and buyer) and possibly two bank reps (vendor and buyer).

Each one has a checklist to ensure each has got all the documents they need to collect.

What happens is;

Buyer's solicitor: needs to hand one or more cheques to vendor solcitor to cover rates and fees.

Buyer's banker: needs to hand cheque to vendors bank to clear previous mortgage.

Vendor's banker: confirms cheque and removes caveat from title.

(A caveat is a log entry on the property title which says this property cannot be sold until this caveat is satisfied, ie mortgage paid).

Vendor's banker: then hands title to buyer's solicitor to confirm title is free and clear then register buyer's name on title.

Buyer's solicitor: hands title to buyer's banker for them to put new caveat on title.

Everyone then recheck's their checklists to ensure everyone has done everything and all cheques have been collected.

Then everyone leaves.

Process takes about 10 minutes.

Michael G
Wow thanks Mike!

I've always wondered about the mystical "settlement" process.

I'm thinking i should generate a simple diagram showing the entire property transaction process and post it back to the forum!

Who actually holds the property title? Office of State Revenue or Land Titles Office or both.
What happens in a "wrap" transaction??? How does the "wrap" buyer get their interest in the property documented as I believe the title remains with the seller?