If you are looking to buy or sell your home in Australia, you’ve no doubt come across the term conveyancing—transferring the ownership of land from one person to another. The process can seem very overwhelming, with an endless list of documents and procedures to organise. To streamline the conveyancing experience for you, here is a comprehensive guide that will help you understand how it works. Shall we dive in?
What is Conveyancing?
Conveyancing is the process of legally transferring the ownership of the real estate, land or house from one person to another. The person who initiates the sale is called the vendor or the seller, and the purchaser of the property is called the buyer.
Conveyancing involves preparing legal documents such as the Contract of Sale or the Transfer of Land document – signed by both the vendor and buyer. The process also requires searches performed on the property, obtaining a mortgage, and attending settlement on behalf of both parties.
Typically, the parties to a conveyancing process are:
- Purchaser – the buyer
- Vendor – the seller
- Bank or financial institution – that provides finance against mortgage over the property
- Licensed conveyancer – who manages all transactions on behalf of the buyer and seller respectively
To put it simply, conveyancing involves the entirety of administrative and legal work necessary to facilitate buying a property as is valid under the law.
What does a Conveyancer Do?
To be honest, it is possible to do this on your own. But it could be a long, arduous and somewhat complex legal process. So we recommend using an experienced and qualified property conveyancer who will:
- Build a liaison with the seller to obtain a contract pack
- Request a mortgage offer from the bank or financial institution
- Conduct all necessary searches with regards to the property
- Evaluate the condition of the property based on the results gathered from local authority searches
- Determine potential closing dates with both the vendor and the purchaser
- Get all administrative and legal documents signed by both parties
- Transfer the agreed-upon deposit amount to the seller
- Prepare the transfer deeds and completion statement for the purchaser to complete
- Handover the transfer deeds to the vendor, duly signed by the buyer
- Request mortgage payment from the bank or financial institution
- Transfer the balance amount of the total buying price (minus the deposit paid earlier) to the seller
- Pay the required land tax and stamp duty, and file a tax return
- Forward all documentation related to the ownership of property transfer to the Land Registry
- Submit the respective title deeds to the mortgage lender
Seems hefty, doesn’t it? Now that you know what a conveyancer does, let’s see how else you can benefit from their expertise.
A) What does a Conveyancer do When Selling a Property?
When you decide to sell a property, here’s what else you can expect from the conveyancer:
i) Preparing all Documents of Sale
A primary role of a conveyancer is to prepare all legal documents, including the Contract of Sale. They also ensure that special conditions, if any, are also included in the contract. This helps protect the seller’s rights from any conflict which may arise later.
The conveyancer will also prepare the Vendor’s Statement and conduct planning and title searches that will go into the final statement. This helps ensure that all the disclosure obligations comply with relevant federal and state regulations. In addition to the above, the conveyancer may also require drawing up ancillary documents for the settlement process.
ii) Legal Advice
A conveyancer also does good leg work that will help navigate the sale process successfully and make the right decisions. If certain conditions should be included in the Contract of Sale to protect your rights as a vendor, your conveyancer will advise you on the same. Additionally, they will help prepare all necessary legal documents that you need to provide the purchaser to complete the settlement process.
If required, the conveyancer will get in touch with the seller’s mortgagee and ensure all legal documents are discharged during the settlement process.
iii) Arranging Settlement
The conveyancer will negotiate with the buyer’s conveyancer and determine the right time for settlement. This will depend on the mutual convenience and banks of respective parties. Once the settlement process is complete, the conveyancer will contact the real estate agent and ask them to hand over the keys to the purchaser.
B) What Does A Conveyancer Do When Buying?
The role of a buyer’s conveyancer is more or less similar to that of the seller’s; however, it is a little more in-depth and complex. Read on.
i) Administrative Documentation and Legal Paperwork Handling
On the buyer’s side, the conveyancer is responsible for preparing all documents necessary to purchase a property and legally transfer ownership. All transfer documents are duly prepared to ensure the property is legally and rightfully transferred to the buyer. The documentation process will also include all important details that comply with the regulations in your territory or state.
ii) Property Searches and Preparing the Statement of Adjustments
Before the Contract of Sale is prepared and settlement is done, the buyer’s conveyancer will perform all relevant property searches in the respective jurisdiction. Often, buyers do not know that when they purchase a property, any negative interest or debt accrued on the property will get transferred to your name once the settlement is done and the title transferred.
The role of a conveyancer is to protect the purchaser’s interest by undertaking necessary enquiries and preparing the statement of adjustments. Different types of property searches that a conveyancer may do are:
- Title search: Ensuring the seller is the legal owner of the property and validate whether there are any liabilities and debts on the property
- Local authority search: Evaluate the prospects of developing the local area or community where the property lies
- Structural: To ensure the property is built in a structurally sound way
- Natural disasters: Assess the risk of flood, bushfire or other natural disasters
- Pest report: Whether the property has some pre-existing problems with termites, insects or other pests
Mandatory searches are most often included in the Contract of Sale, while buyers can request additional searches through the conveyancer.
iii) Reviewing the Contract of Sale
If you are the purchaser, your conveyancer or solicitor will review the Vendor’s Statement and Contract of Sale to identify unusual clauses, potential errors or other areas of red flags. They will also advise you on any terms and conditions that should be added to the contract to protect your rights. Having a conveyancer understand and explain the information mentioned in the contracts will protect the buyer from potential costly risks.
iv) Arrange Settlement with the Mortgage Lender
Although a conveyancer is not directly involved with the buyer’s mortgage lending, they can help streamline the process by arranging settlement with the bank or financial institution. They can legally advise you regarding mortgage terms and documents, request a copy of the mortgage offer from the lender, request payment of mortgage advice, and much more.
v) Handover the Deposit, Transfer Deed and Completion Statement to the Seller’s Conveyancer
The buyer’s conveyancer has the responsibility to transfer the deposit amount and the balance of the purchase price to the seller’s conveyancer. They will also get the transfer deeds and completion statement signed by the buyer and hand over the same to the seller’s conveyancer.
vi) Submit Tax Return and Pay the Duties
The role of a buyer’s conveyancer is also to pay the required land tax and stamp duty and file a tax return.
Once all processes are done and settlement completed, the documents regarding the transfer of ownership and title deeds will be transferred to the Land Registry and mortgage lender respectively.
C) Preparing All Legal Documents
Preparing all required legal documents is one of the most crucial functions of a conveyancer. Their role is to draw up the Contract of Sale between the seller and the purchaser – expressing the rights, duties and obligations of both the parties. For the buyer, the conveyancer will prepare all transfer documents and also send a copy of important documents for signing. These include:
- Form mentioning the seller’s property information
- Property fittings, contents and fixtures form
- Title information documentation and plan
- The mortgage deed and transfer deeds
All documents are prepared and submitted complying with legal regulations in the respective states and territories.
D) Legal Advice
To protect the rights of both the vendor and the purchaser, a conveyancer plays an integral role in providing legal advice to help make informed decisions. From understanding the clauses included in the Contract of Sale to including specific conditions they think are important, staying compliant with local regulations, or making decisions based on property searches – their legal advice can help streamline the entire process.
Conveyancer vs Solicitor: What’s the Difference?
When you consider buying or selling a property in Australia, you may face the dilemma of choosing between a solicitor and a licensed conveyancer. What is the difference between the two? Let’s understand here.
What a solicitor does:
A solicitor is ideally a legal practitioner but who has specialised in conducting conveyancing. They hold a certificate for practicing law and are more involved with handling only the legal aspects of transferring a property.
What a conveyancer does:
A conveyancer, on the other hand, is specifically qualified and trained to handle diverse aspects (and not just legal) of transferring a property from the seller to the buyer. They can prepare all required documentation, give legal advice, conduct administrative and legal work, and ensure the sale or purchase runs efficiently.
Whether to choose a solicitor or a conveyancer will depend on your individual needs. If you need a legal practitioner to get more general advice such as tax affairs related to the property, then a solicitor would be an ideal choice. However, if you want a licensed professional to handle the entire conveyancing process in an economical way, then using a conveyancer would be the best bet.
Do I Need a Conveyancer or Can I Do it Myself?
Conveyancing might sound like the simple process of transferring the title of ownership from seller to buyer. So yes, you do the conveyancing on your own and save thousands of dollars. However, DIY conveyancing would require you to know the exact procedures and regulations, and having the conveyancing kit throughout the process is essential. Having a good kit will guide you through the step-by-step process of conveyancing and also offers valuable tips to avoid serious mistakes.
Conveyancing kits may cost up to $100 in Australia. Additionally, a significant amount of time and money goes into conducting the necessary searches. And after all that, you still stand the chance of making expensive mistakes. In that, it is always recommended to have a legal professional by your side. That would mean incurring a certain cost but in the long run, it can help you save more money and time, while ensuring the conveyancing process is completed successfully.
How Much Does a Conveyancer Cost?
The cost of hiring professional conveyancing services will vary depending on several factors. Typically, the conveyancer’s legal fee (exclusive of VAT) will vary based on the price of the home and whether it is leasehold or freehold. Secondly, other costs add up to the conveyancer’s fee, including payments to third parties for property searches, disbursements, land registry fees, SDLT, etc.
Common disbursements that you need to consider here are mortgage registration, certificate of title search, inspection fees, registering property transfer and any other costs that the conveyancer pays on your behalf. In some cases, conveyancers would charge a fee for every service they offer. So, you need to ensure that the price quote is all-inclusive with no hidden costs.
The NSW Government states that a conveyancer’s fee, excluding third-party fees and disbursements, may range between $700-$2,500.
How do I Find a Good Conveyancer?
Selecting the right conveyancer can be cumbersome, given the plethora of choices available today. However, it is an important step to ensure the streamlined and efficient completion of the property purchase or sale process. So, discussed here are the crucial steps to consider in making the best choice:
- Is the conveyancer licensed?
This is a vital factor to consider that helps ensure a hassle-free and reliable conveyancing process.
- Check their experience and credentials
An experienced conveyancer is likely to better handle your conveyancing, provide the legal advice you can count upon, and ensure stress-free settlement while protecting your interests.
- Ask for recommendations
One of the best ways to evaluate the proficiency of a conveyancer is to check their recommendations and reviews from previous clients. If people are saying nice things about them, then you are likely in safe hands.
- Having local knowledge is important
While offshore conveyancers may offer attractive rates, it is always better to hire someone with specialised knowledge in your location. They will have updated knowledge about local news and developments, and this can help strike a fair deal. It can also help speed up the settlement process.
- Evaluate their fee structure
Assessing their fee structure is important – do they charge an hourly fee, have a flat-rate system or take a percentage of the property value? The fee should be clear and transparent, with no hidden charges.
For a seamless conveyancing experience, it is advised to hire an experienced conveyancer who leverages their skill and modern technology to fuel the process and deliver the best value for your money.