Wondering what conveyancing is?
Well put simply it’s the transfer of ownership of a property from one party to another.
Pretty simple right?
Sadly, I’d be wrong to believe that. Usually it involves several steps that can get quite complicated. These differ from if you are the party purchasing the property or if you’re selling it but I’ll try to cover both angles. I will be covering:
- Exchanging the Contract
- Cooling Off Period
- Formal Questions
- Inspection
- Settlement
- Finishing Up
- Adverse Matters
- Insurance
- Conveyancer vs Solicitor
- Conclusion
Ideally, you should be planning your process before you place offers on properties or list your property for sale to ensure you have a legal advisor by your side supporting your purchasing or selling goals, ready to jump straight into the conveyancing process.
I’ve included some pointers on how to choose the best practitioner for your objectives below but for now let’s take a look at the conveyancing process.
The Conveyancing Process
Once you’ve won the offer or auction, the conveyancing process gets underway. The solicitor for the party selling the property will first conduct a title search. Basically, this check whether the seller actually owns the property to assure both sides that it is a legal sale.
The solicitor will also complete several government searches and acquire the relevant documents for your type of property.
They will then provide these to the buyer, alongside the initial drafted contract for the sale.
It’s important to confer with your solicitor to understand the process and to make sure everything is in order. For example, asking them if there are any restrictions on the property (heritage listed etc), if the title deeds are in order and whether there are any other factors that might affect the sale.
A good solicitor will keep you informed of these processes, so you fully understand either what you are passing on to the buying party or what you are purchasing.
Exchanging the Contract
It is at this point that the sale of the property becomes binding, by each party passing over a signed identical version of the contract to the other side.
The buying party will also have to provide the cheque for the deposit on the property as consideration for the contract.
Your solicitor should be managing this process, checking the two copies of the two contracts to make sure they are identical and informing you in how and where to sign the documents.
This sounds like a scary process, but it can be quite simple with the support of a solicitor.
A good solicitor will have it under control and will explain each step of the process so that you are confident in committing to this process.
Contemplation time on the purchase (Cooling off Period)
Legally once the contract is exchanged there is a cooling off period.
Essentially this means that the buyer has a defined period of time that they can back out of the deal. This is to help mitigate against things like high-pressure sales and buyer’s remorse.
It isn’t a free process though, as if the buyer backs out they must pay the seller a small slice of what the agreed price was for the property. This is currently 0.25%, so, if you have an agreed price for the property at $100 (However realistic that is) then if the buyer backs out they would forfeit 25 cents to the seller.
That’s not really a significant cost when dealing with $100 but with the prices of houses you can image it can be hefty.
How long the cooling off period is varies from contract to contract but usually its 5 business days from after the exchanging of contracts.
If the contract doesn’t specify a time, then the cooling off period is ongoing until the conveyancing process is complete.
There’s also this thing called a 66W certificate. Not as scary as it sounds but it basically allows you to skip the cooling off period and get further along the process in a shorter time frame. The buyer will usually ask for it, but the seller doesn’t have to agree, holding their right to the cooling off period.
Cooling off periods are great if you’re buying, but on consultation with your solicitor you feel you don’t need it then by all means commit to continue moving through the purchase.
Tip from Experience: Use this time to check for things like development proposals around the property that might affect you. For example, I’ve done the conveyancing on properties where the view was going to be built out within a year, killing the most significant contributor to the property’s value.
Question Time
Your solicitor should work with you on a set of questions to send to the seller.
These are known as requisitions on title and are formal questions that the selling party will answer to assure your purchase.
They are quite useful for identifying areas of the property that you will need to inspect.
Time to inspect the property
The buying party has the right to inspect the property leading up to the completion of the conveyancing process (specifically the three days prior).
Ideally the selling party should leave the property by this time, but they’re not obligated to. This is especially true if the sale doesn’t include furniture or other possessions.
A cooperative seller will have vacated the property and left it in a tidy and clean state.
It is worth getting an inspector in for this stage to ensure you’re not missing any fundamental or costly flaws in the property.
If the buyer does uncover something to their dissatisfaction they may force both parties to wait on the final settlement. This will continue until the issue is resolved by the seller.
Sometimes the buyer doesn’t want to delay on the purchase and you might not want to either, in this case it is possible to arrange for the settlement to occur regardless and to withhold some on the cost of the property until the issue is fixed.
Settling the contracts and getting the keys
So, you’ve made it through most of the process and its finally time to pass over the ownership. Whichever side you’re on this is an exciting and commendable time
The solicitor for the buyer will have followed the process up to this point and prepared the necessary documentation, worked out the final figures for settlement and make sure that the cheque is ready and in order.
They’re also responsible for arranging the meeting between the two parties.
There is also the usual case of a third party, that being the bank. If the seller has a mortgage over the property, the Bank will have to be present to receive the cost owed to them and allow the seller to release the property.
The meeting will flow in a structured manner.
Firstly, the buyer will pass over the cheque for the full price of the property.
They will also hand over a ‘order on agent’. Basically, this means that the real estate agent has authorisation to release the deposit they’ve held. They will release it after they have claimed their fee’s and any other fees applicable to your conveyance.
Then the seller’s solicitor is up, they hand over an executed transfer document and the documents of title over the property.
Both sides will then sign a set of documents for the transfer and title deed. If there is a lender (usually a bank), they will ensure that the transfer and mortgage is registered.
The lender will take possession of the mortgage and title documents until they have received their entire loan back in repayments.
Now the fun part.
The seller will immediately hand over any access devices such as keys, codes, swipe cards or remotes. Like the deposit, this is the consideration in the contract meaning what actually puts it into force. So, your solicitor will ensure that this physically occurs to follow legal procedure.
The seller then no longer has access to the house, unless it is their place of primary residence. In this case they may hold onto their ‘keys’ until Mid-day the following day.
Finishing up
Finally, the bank on behalf of the buyer will conduct a series of final checks including the transfer of the mortgage, title documents etc.
Once these are complete the bank signifies that the transfer of ownership has been completed.
You will also have to lodge your new ownership with the Land Titles Office. A good solicitor will walk you through this process to ensure that you have taken all the necessary steps
Then that’s it!
The conveyancing process is over, and the new owner has possession of the property.
There’re a few extra things you should know though…
Adverse Matters
Throughout the process, the seller must disclose anything that would affect the outcome of the conveyance. Basically, if there is something negative about the property that isn’t obviously apparent, but they are aware of (think termites even though the inspection should have picked this up).
If this does occur, then the buyer has the right to back out of the contract even after it has settled.
This only works if the buyer wasn’t aware of the issue. For our termite example, if the inspection had picked it up but the seller didn’t tell them, the buyer wouldn’t be able to back out of the contract.
Insurance
Essentially as the ownership of the property doesn’t change until the conclusion of the process, the risk of damages etc on the property still fall under the seller’s responsibility.
For this reason, it is strongly recommended that they maintain their insurance until after the settlement at the end of the conveyancing process.
For example, if the house burnt down after the contracts had exchanged but before the completion, then it would be the seller’s loss.
Conveyancer vs Solicitor
By this point I think its relatively clear that the process is quite simple, but there are plenty of nuisances that would catch an untrained practitioner. The decision of whether you go with a solicitor or a conveyancer to handle the process for you is important. Probably even more important is which solicitor or conveyancer. You should be looking at;
- Experience: Regardless of which option you go for, you should be asking for the experience that the practitioner has earned. Whether they are relevant to your property and whether they have seen similar situations to those your sale falls under.
- Employees: You should also be looking at whether they will actually do the work themselves or if they have staff that will really be looking after your conveyance. Ideally you should be looking for someone who will manage it themselves as they are the ones who have earned the experience. If you do go for someone who won’t directly be managing your process then check the experience of the people who will, despite their protests.
- Insurance: Solicitors are required to be insured on the advice that they give so that if they do make a mistake then they have the financial support to cover the cost. Conveyancers aren’t required however some do, so it is worth checking with whoever you are looking at. I would avoid uninsured practitioners as a rule with any legal dealings.
- Pricing: There’s a lot of options out there, and in the modern world many of them offer fixed-fee pricing. This is usually the better option over an hourly rate as you can control the cost and budget the expenses. Generally, you want to avoid the cheapest options as they usually lack the experience or support and are too desperate for a work load. Having said that don’t run for the most expensive, since there are plenty of high quality options available to fit your budget.
- Training: It is worth checking what the practitioner’s qualifications are as well, just to make sure that they are authorised to be dealing and that they are well suited for your needs.
Conclusion
Purchasing or selling a property can be easy, but usually it’s a stressful time. Hopefully I’ve provided you with some insight as to how the process works so that you can have a good idea as to what is going on during the conveyancing process. A good solicitor should take the stress out of it, keeping you informed as to what stage you’re up to and how to proceed. As a rule, at Teddington we try to make the “What if” in your life a reality and I feel that by keeping you informed and safe in experienced hands encourages this regardless of which solicitor you end up trusting.
If you still have questions, feel free to get in contact or give me a call at +61 2 8096 8143
Nicole says: 
