Home conveyancing is simply the process of transferring property ownership from the home seller to the home buyer. Although the journey can take many routes, there are a few common stops along the way that are especially important from the buyer’s point of view: finding and hiring a lawyer or conveyancer; reviewing the Vendor Statement; signing a Contract of Sale; taking advantage of the cooling-off period; and signing the final paperwork on the day of settlement. Let’s take a good look at each of these key stages of the home conveyancing process.
Hiring a lawyer or conveyancer
Because real estate agents work for the seller, buyers will want to hire their own guides to help them along. There are two types of professionals that can guide a buyer through a home conveyance: a lawyer and a conveyancer. Although an experienced conveyancer can serve as a helpful guide in the home conveyance process, there are advantages to using a lawyer. A conveyancer can only provide limited services, and cannot draft certain legal documents or provide written legal advice on them. If they do conduct legal activities beyond their scope, conveyancers may risk having their indemnity insurance voided, which can leave the buyer in a bad spot. With a lawyer, you don’t have to worry about these issues.
Depending on your arrangement, your lawyer or conveyancer will perform government-database searches on the property; draft, review and lodge key documents; handle interactions with the bank and lender; and oversee the final settlement. The earlier you enlist the help of a lawyer or conveyancer, the better off you will be. Don’t wait until it comes time to draft and sign legal documents. The earlier you secure a conveyancer or lawyer, the sooner they can begin working on your behalf, and the less likely it is that there will be any delays in settlement.
When considering a lawyer or conveyancer to hire, ask them what their fees will be. Do they have a fixed fee option? If at all possible, try to work with a lawyer or conveyancer that offers you a fixed price for their services. This way you will have a clearer picture of your total costs and can budget accordingly. Also, ask them if they participate in e-Conveyancing. This is a relatively new option that streamlines the conveyancing process in Australia. In particular, e-Conveyancing makes use of PEXA (Property Exchange Australia), an online property exchange network that lawyers, conveyancers, and institutions across Australia use to perform financial settlements and lodge key documents online. If your lawyer or conveyancer uses PEXA, they can potentially save you time and money.
The Vendor Statement
The Vendor Statement is an important legal document, required by many states in Australia, that the seller usually provides to the buyer along with the Contract of Sale. The document contains a list of seller disclosures about the property, such as title details, zoning requirements, connected service locations and anything else that the buyer ought to know about the property they plan to buy. Your lawyer or conveyancer will help you interpret, analyze, and make informed decisions based on key disclosures in the Vendor Statement.
The Contract of Sale
The Contract of Sale is the legal agreement to transfer the property from seller to buyer, subject to certain conditions. Every contract should contain a detailed description of the property; the names of the buyer, seller and real estate agent; the details of any licensed conveyancers and lawyers involved; the date of settlement; the property’s purchase price; the amount of the buyer’s deposit; and the balance that the buyer will owe at settlement. The contract must also specify whether the price includes the goods and services tax (GST), and if so, the amount. Because every contract is unique, the remaining conditions depend on the situation, such as whether the purchase is dependent on the buyer successfully receiving financing.
The cooling-off period
The cooling-off period is a period of time that the state grants buyers to walk away from the deal if they have second thoughts after signing the contract. All but one Australian state, Tasmania, offers the buyer a cooling-off period. However, the number of days that the period spans differs by state. Most states also have a relatively modest fee associated with breaking the contract during the cooling-off period, although this is usually much less than the deposit money that the buyer would otherwise forfeit without the protection the cooling-off period provides. There may also be unique situations, such as auctions, in which the cooling-off period does not apply.
The settlement is the final stage of the home conveyancing process. On the day of settlement, the title transfers to the buyer, while the seller and other parties receive their portion of the settled funds. A partial list of common fees that the buyer will pay in the final settlement includes mortgage fees and charges; stamp duty; and transfer fees. However, always review a complete list of expected charges with your lawyer or conveyancer beforehand to find out exactly how they impact your financial situation. Because the stamp duty in particular is such an important variable, many buyers make use of a stamp duty calculator to get an initial estimate. However, always reach out to your lawyer or conveyancer for the most accurate total.
Happy home conveyancing
From a buyer’s point of view, home conveyancing is the rewarding transition from homebuyer to homeowner. Some of the most common stages of the home conveyancing process include finding and hiring a trusted lawyer or conveyancer; reviewing the Vendor Statement; negotiating and signing a Contract of Sale; passing through the cooling-off period; and signing final paperwork at settlement. If you are able to pass through all these stages with patience, and the right guidance, you should be a happy homeowner in about four to six weeks.