Conveyancing: What's Involved?

The best course of action when it comes to buying property in Australia is to hire a professional conveyancing solicitor. Even so, it doesn't hurt to learn a little bit about the conveyancing process so that you can make more effective decisions. As daunting as it may sound, the conveyancing process can be broken down into a few basic steps.

The Contract -

Conveyancing properly begins with the signing of a contracts. The contract is signed by the buyer as an 'offer; at which point it is provided to the seller for acceptance. Alternatively, the seller returns the contract with amendments as a counter offer. At the same time, a deposit is usually made - typically for about 10% of the purchase price.

Five Day Cooling Off Period -

Following the exchange of contracts, a five day cooling off period typically occurs. This gives the buyer the opportunity to get out of the contract if he realises that the deal isn't suitable. A penalty of approximately 0.25 percent is charged to the buyer if he decides to back out of the transaction.

Preparing The Transfer Documents -

In mot instances, the transfer is prepared by the buyer's solicitor. The documents sent to the seller's solicitor as the sellers signature is required. Once the documents are signed, they are returned to the buyers solicitor where they remain until the settlement. At settlement the documents are lodged with the Titles Office so that the property is transferred to the buyer.

Making Land Enquiries -

All property inspections, assessments and other enquiries are made during the period between the cooling off and the settlement. The buyer takes this opportunity to make these enquiries before finalising the terms of their mortgage with their lender. This is the time to find out if there are any problems that need to be cleared up.

Mortgage Documents And Requisitions On Title -

Next, the mortgage document will be prepared by the lending institution. Requisitions on title are also sent to the seller, who then passes them along to the purchaser. These requisitions may alert the purchaser to disputes involving the property, such as boundaries and other details. This allows the buyer to fully understand what they are getting themselves into.

Settlement Statement -

The seller will have a settlement statement finalised so that the purchaser knows precisely what is owed upon settlement, in order to prepare accordingly.

Insurance -

If the property is financed, the lender will require proof that the property about to be purchased is insured adequately. This proof must be provided before settlement can officially be reached.

The Final Search -

A final search of the title must be conducted on the day of the settlement. It is done to ensure that the property is free of any restrictions or interests.

Settlement -

Settlement is the final step in the conveyancing process. Settlement occurs when transfer of funds takes place in exchange for the release of any relevant interests on the title and the title deed (if applicable). The buyer's solicitor either hands these documents to the buyer's bank for registration, alternatively registers them on the buyers behalf with the titles office. At this point, the seller's solicitor provides the settlement cheque to the seller.