Although some home buyers find the process of home conveyancing intimidating, it doesn’t have to be. Home conveyancing is just a matter of transferring the property’s title to you, the buyer. While it’s possible to go it alone, most buyers seek the guidance of a property lawyer or licensed conveyancer to navigate the legal and financial waters with peace of mind. Once you’ve hired a guide, they can help you look over the seller’s Vendor Statement; draft and negotiate a Contract of Sale; use your cooling-off period wisely; and, finally, take care of all the financial and legal paperwork involved in the property settlement. Below we explore each of these key stages as you move confidently toward home ownership.
A professional guide
Hiring a professional property lawyer or conveyancer to help you navigate the complexities of the conveyance process is a wise move to take at the outset. Although not legally required in mostAustralian States, it’s widely considered to be the smart thing to do.
The Vendor Statement and Contract of Sale
The Vendor Statement is one of the most important documents you’ll come across in the home conveyancing process. Provided by the seller, this disclosure document essentially lays out all the information that the buyer ought to know about the property, such as zoning and title restrictions. However, each state in Australia takes a different position on the Vendor Statement. For example, in Victoria, where a Vendor Statement is called a Section 32, requires perhaps the most comprehensive disclosure from the seller. Tasmania and the Northern Territories, on the other hand, do not require a Vendor Statement at all, although lawmakers have been lobbying for a required seller’s disclosure document in both states. It may just be a matter of time before the Vendor Statement is a central part of every property transaction in Australia.
Meanwhile, chances are that you will also come across some form of seller’s disclosure along with the Contract of Sale, and will want to spend time with your lawyer or conveyancer looking it over in detail.
Although the required contents of the Contract of Sale itself differ from state to state, you will always find a few key pieces of information: the property address; the names of the buyer and the seller; the date of the contract; the settlement date; the deposit amount; and the sale price. However, the contract will also contain more complex information that you and your lawyer or conveyancer may work on together. These will include any conditions that the contract depends upon, such as your need, perhaps, to sell your current property in order to finance your purchase. The Contract of Sale may also include any property inspections that the house must pass, as well any items in the house, such as window drapes, that you wish to include in the sale.
The cooling-off period
With the exception of Tasmania and Western Australia, all of the states and territories in Australia offer the buyer a cooling-off period to back out of the contract if they have second thoughts about it. If the buyer does back out, the contract is voided and they do not have to forfeit their deposit. However, they will have to pay a fee. The number of days in the cooling-off period, as well as the fee, varies from state to state. Remember, however, that the cooling-off period does not apply to auction sales.
Settlement and title lodgement
Real estate transactions are now joining the digital age with the option of online settlement through a process known as e-Conveyancing. PEXA (Property Exchange Australia) runs the electronic conveyance platform that lawyers, conveyancers, financial institutions and other professionals use to meet and complete property settlements in a virtual environment. One of the advantages for buyers is the electronic lodgement of the title with the Land Registry, reducing wait times and last-minute legal hangups. Sellers, in turn, have the advantage of receiving their settlement funds right away, rather than having to wait days for a bank cheque to clear. Furthermore, both buyers and sellers can more easily track the stages of the settlement process as they unfold. However, it’s still possible to settle the old way, in a brick-and-mortar building with paperwork and bank cheques. It’s up to you.
Although there are several additional fees (such as mortgage and transfer fees) associated with the settlement process, the largest is usually the stamp duty payment, which is a significant state tax on certain transactions in Australia. Unless you qualify for an exemption, the stamp duty payment could add a significant sum to your final settlement. Therefore, always consult with your conveyancer or lawyer ahead of time to work out exactly how much, or how little, you will need to pay in stamp duty.
The final stage in the settlement process is generally having the land title lodged with the Land Registry, officially registering it in the buyer’s name. This stage is as important to the buyer as receiving funds is to the seller. If the settlement is handled through e-Conveyance, it can happen more quickly.
A clear path to home ownership
While choosing the right home to buy is a critical stage in the home buying process, the next stage, home conveyance, is just as important. Although you can go it alone, it’s always a smart move to seek the guidance of a lawyer or conveyancer at the outset. They can help you negotiate and navigate the intricacies of the Contract of Sale, which in most states will include some version of the Vendor Statement. Unless the property is in Western Australia or Tasmania, you will then have a cooling-off period during which time you can walk away from the transaction, subject to a small fee, if you have second thoughts. If you decide to continue, then the conveyance moves into the settlement phase. You can choose e-Conveyancing for a streamlined online transaction, or you can opt for the paper-based, manual method. Either way, settlement involves transferring funds to the seller; paying stamp duty and other fees; and lodging the title with the Land Registry. Once that happens, you will have arrived at your destination: home ownership!
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