Conveyancing – what is it and why you should care
Conveyancing is the process of transferring the title of real property from a seller to a buyer. Buyers generally choose to work with a licensed, professional conveyancer, whose job is to provide advice and information about the sale of a property, prepare the documentation and conduct the settlement process. Conveyancers do not have to be lawyers, but many lawyers handle conveyancing transactions.
The conveyancing process typically goes through six steps:
- The contract of sale. The seller’s real estate agent or conveyancer generally prepares the contract of sale. The buyer’s conveyancer reviews the contract and negotiates any changes before the parties sign and the buyer pays the deposit. During a “cooling off” period of a few business days, the buyer may withdraw from the agreement, forfeiting the deposit but incurring no legal penalty.
- Searches and inspections. Most contracts are contingent on the satisfaction of certain conditions concerning pest inspections, financing, and a variety of property searches. The purchaser typically orders and reviews the inspection. The buyer’s conveyancer typically orders and reviews the property searches. The buyer’s obligation is not fixed until all contract conditions are satisfied.
- Many prospective home buyers seek a home loan pre-approval to assess borrowing capacity before searching for a house. First-time home buyers should explore eligibility for a First Home Owner Grant scheme (“FHOG scheme”). A conveyancer who is not an attorney may not offer financial advice to a client. A conveyancing solicitor, on the other hand, may assist clients in negotiating and understanding financing options.
- Pre- settlement preparation. Final figures may not be available until settlement, but a conveyancer should keep the buyer informed of costs throughout the process. In addition to the cost of conveyancing services, other fees may come with inspections, financing and miscellaneous items like photocopying.
- This is the big day. Buyer, seller and lender exchange legal documents and the remaining purchase price is paid. There may be final adjustments for taxes, rental fees and the release of existing mortgages. Your conveyancer will accompany you at the settlement, answer questions and review documents.
- Post settlement matters. The process is not done until the paperwork is complete. After settlement, the buyer’s lender will notify relevant authorities of the change in ownership and lodge transfer documents lodged with the Land Titles Office.
Conveyancing 101: how to find a conveyancer
By all means, ask friends, family, your real estate agent or other trusted professionals for referrals. This is likely the best source of information.
In addition, the Australian Institute of Conveyancers maintains a list of conveyancers who are members of the association. Other resources include the Law Society of NSW, the Office of the Legal Services Commissioner and the Home Purchase Advisory Service.
Once you have assembled a list of conveyancers, make appointments to interview them, just as you would anyone you are about to hire for an important financial transaction.
Before hiring a conveyancer, ask:
- If the individual is a member of the Australian Institute of Conveyancers,
- Whether the conveyancer is licensed by NSW Fair Trading,
- Whether the conveyancer carries professional liability insurance and how much,
- What types of property the conveyancer specialises in,
- What it will cost and when costs will be payable,
- An estimated date of settlement, and
- The name and telephone number of the conveyancer with whom you will be working and a schedule of regular updates.
During the process of conveyancing, do not hesitate to ask for an explanation of any expenses that you do not understand or the reasons for any delays. In addition, insist on a detailed, plain-language explanation of the terms of mortgage documents before the settlement date. The best conveyancing experience should contain few, if any, surprises.
Author: Rolf Howard is managing partner of Owen Hodge Lawyers. He has been in the legal practice since 1986 and a partner of Owen Hodge Lawyers since 1992. Rolf focuses on assisting clients to proactively manage legal responsibilities and opportunities to achieve competitive advantage