Would you like a free property profile & valuation report? Request your report here.
The process of home conveyancing begins with signing the Contract of Sale and ends with transferring the Certificate of Title. As the process unfolds, the seller is responsible for several key tasks, which grow greater in number if the seller has a mortgage to discharge. Either way, it’s important for every seller to have a strong grasp of the fundamentals involved in the seller‘s side of the home conveyancing process in order to ensure a successful sale.
Hiring a home conveyancer or property lawyer
The home conveyancing process is a highly formal, paperwork-intensive process, and for this reason, most sellers choose to hire a licensed home conveyancer or lawyer to handle the extensive paperwork, as well as all the legal ins and outs, involved. However, as a seller, you can be thankful that the process is slightly less complex, and therefore less costly, for sellers than it is for buyers.
Knowing your state or territory’s requirements
Before proceeding with the Contract of Sale, it’s important to get to know the unique steps in the home conveyancing process in your state or territory. This is even more important if you’ve never sold property in your state or territory before, or if there have been significant state-level legal changes to seller obligations in recent years. Your professional conveyancer or lawyer will be a great help here.
Preparing the Contract of Sale
To avoid legal issues, it’s critical that you make your Contract of Sale available to all prospective buyers of your property. Your selling agent, rather than your conveyancer or lawyer, may be the one that drafts the initial Contract of Sale for you. However, it’s often wise to ask for your conveyancer or lawyer to review, if not altogether write, the contract to ensure that there are no lingering legal concerns. Further, depending on your arrangement with your seller‘s agent, your conveyancer or lawyer will likely be involved in the inclusion of any subsequent, additional language incorporating material changes to the contract resulting from further negotiations with the buyer.
Preparing the Vendor Statement
This is an area where states and territories differ greatly. Some states, such as Victoria, legally require that the seller disclose highly detailed information about the property that the buyer would want to know. Other states require less information, or a seller‘s disclosure that takes a different form than the standard Vendor Statement (aka Section 32) that originated in Victoria. However, regardless of the state or territory you live in, you’re probably going to need to disclose some key information about your property to complete the sale.
In addition to drafting your Vendor Statement, your conveyancer or lawyer will perform several title-related searches in order to obtain the necessary property certificates needed to substantiate the information provided in the Vendor Statement itself. Therefore, you should expect fees for these searches to show up in your total disbursement costs.
Understanding the buyer’s “Cooling-Off” period
Most states grant the buyer a cooling-off period that lasts for several business days after both parties have signed the Contract of Sale. During this time, the buyer can elect to back out of the Contract of Sale and keep their deposit money. However, if they do back out during the cooling-off period, the buyer will still need to pay a fee, which differs from state to state and is generally paid to the seller in lieu of the deposit. Note that the cooling-off period only applies to the buyer, not the seller, who cannot cancel the contract.
Filling out the mortgage discharge form
Assuming your property has a mortgage, your conveyancer or lawyer will provide you with a mortgage discharge form to fill out and pass on to your lender. Be sure that you also give your lender your professional guide’s contact details. Without them, your bank may not talk with your conveyancer or lawyer, which could disrupt the settlement process. Also note that you may need to pay a discharge fee, as well as an early-termination fee, to your bank.
Subject to certain conditions, at this stage you may also sign an Early Release of Deposit form authorizing the release of the buyer’s deposit to you prior to settlement. If the amount of your mortgage constitutes less than 80 percent of the agreed-upon price in your final Contract of Sale, then the buyer must also sign the document.
Signing the transfer documents
At this point, your conveyancer or lawyer will provide you with official transfer documents that you will need to sign in front of a Justice of the Peace, lawyer, or other legal witness in order to render them valid.
When your lender is ready to proceed to settlement, they will let your conveyancer or lawyer know. Unless you’ve opted for e-Conveyancing, your conveyancer or lawyer will then book settlement for you at a brick-and-mortar establishment.
Reviewing the Statement of Adjustments
Generally, the buyer’s conveyancer or lawyer will provide your counterpart hired professional with a draft of the adjusted totals, often called the Statement of Adjustments, for the water and council rates, for your approval. In turn, it is generally your responsibility as the seller to coordinate with your lender and respond with the final settlement totals incorporating the adjustments. Your conveyancer or lawyer will help you.
Handling settlement and title lodging
Although there are many variables involved in choosing a settlement date, settlement generally takes place about five to six weeks after the Contract of Sale is signed by both parties. Your professional guide or their agent will attend settlement in your place unless you wish to attend.
An e-Conveyancing settlement
If you and the buyer agree to settle with e-Conveyancing (available in most states and territories through PEXA), then the settlement will not take place in a brick-and-mortar office, but in a secure virtual environment. This holds several key advantages. For example, if you choose e-Conveyancing, the total costs of the conveyancing process should decrease significantly, and your settlement funds should clear right away.
If you and the buyer decide not to opt for e-Conveyancing, settlement will take place in a brick-and-mortar establishment. Conveyancing costs will tend to increase, and your bank cheque may take several days to clear.
As soon as the Land Registry has transferred the Certificate of Title into the buyer’s name, the home conveyancing process is complete. Under e-Conveyancing, this process will generally take place more quickly, and with less risk of last-minute problems. Either way, once the title is transferred, the Land Registry will generally notify water and council that the property is now under new ownership so you won’t need to.
Receiving final copies
As a final step, your conveyancer or lawyer will provide you with copies of key documents, correspondence and any other paperwork confirming your successful sale.
The seller‘s side of home conveyancing
From the Contract of Sale through the lodging of title, the home conveyancing process is where the rubber hits the road for both sellers and buyers. Although the process is a bit easier on the seller‘s side, sellers are still legally responsible for the central task of transferring the Certificate of Title to the buyer. If the seller has a mortgage to pay off, this adds another layer of complexity. Therefore, as a seller, it’s important not only to bring a professional on board but to also learn all the fundamental steps, outlined above, that make up the seller‘s side of the home conveyancing journey.
Read to talk to us about conveyancing? Get started here.