Your simple step by step guide
Are you looking to buy a property?
You’ll need either a conveyancer or Melbourne property lawyers to help you complete the transaction.
At P&B Law, we offer trustworthy, common-sense advice without legal jargon.
We are here to make sure your purchase goes smoothly every step of the way.
Read on to learn more about property conveyancing and the process involved.
The simple definition of conveyancing
If you are after a simple definition of conveyancing, here it is:
Conveyancing is the transfer of the legal title of a property from one person to another.
This process has two major parts:
- Contract exchange
- Settlement
However, numerous additional tasks are necessary for the correct and proper transfer of the property.
That’s why it’s so important that you hire experienced Melbourne property lawyers for property conveyancing when you are ready to buy.
You may be wondering if it matters whether you hire a conveyancer or a lawyer to help you with your property conveyancing needs.
If that is the case, read our article ‘Property Lawyer vs. Conveyancer: What are the differences?’
The steps to a successful conveyancing transaction
Step 1 – Contract of sale
The Contract of Sale is a vital document for the transaction that will take place. As disputes can occur between vendors and purchasers, experienced professional Melbourne property lawyers must prepare and vet this document before any party signs.
Step 2 – Make an offer
If you are serious about purchasing a property, you will need to make an offer. The seller might accept this initial offer, or they may attempt to negotiate with you on the price and conditions of the sale.
Step 3 – Paying the deposit
When the vendor accepts your offer, you both agree to exchange contracts. This is when the buyer pays the deposit, typically 10% of the purchase amount, and this sum is held by the Melbourne property lawyers representing you.
Step 4 – Buying at auction
To buy at auction, you must make the highest bid. You should have your Melbourne property lawyers inspect the Contract of Sale before the auction. Likewise, all property inspections should have been done, and you need to have finance lined up.
Step 5 – Insurance
You will need to buy insurance, as the responsibility for damage to the property passes from the vendor to yourself at settlement. Some lenders require proof of existing comprehensive building insurance as a loan condition.
Step 6 – Exchange of contracts
The exchange of contracts occurs next, initiating the business end of property conveyancing. Both the vendor and purchaser will be provided with a copy of the agreement. The deposit will be paid when the contracts are signed. The rest of the money outstanding will be paid at settlement.
Step 7 – Cooling off period
There is no cooling-off period if you buy at auction. However, if you purchase via private treaty, then a cooling-off period applies, which allows you time to organise pest and building inspections and find finance. You can revoke the contract before the cooling-off period ends.
Step 8 – Property title transfer
Your Melbourne property lawyers will organise a transfer document, get you to sign it, and pay stamp duty to register the document. They will then obtain the vendor’s signature on the form, validating the transfer. You must pay stamp duty to your lawyer before or at the settlement. Title transfer is the usual meaning of property conveyancing.
Step 9 – Completion time
If buying off the plan, completion time can be an issue, as the contract is only done after construction is finished and new titles are issued. In property conveyancing contracts, there is a clause called “time of the essence.” If either party fails to comply with actions on the nominated dates, the other can terminate the contract and sue for damages.
Step 10 – Requisitions and warranties
Requisitions are questions about the property that the information provided by the vendor may not have previously answered. In Victoria, they are now known as warranties in the contract. The vendor’s lawyer or conveyancer must reply to these questions. Property conveyancing also involves your lawyer conducting searches for any defects in the title.
Step 11 – Outgoing mortgagee
If the seller has a mortgage, the mortgagee will need to be involved in settlement to name a payout figure and provide a mortgage discharge and the certificate of title or title deed.
Step 12 – Adjustments
The property conveyancing process continues, with “adjustments” made based on any council rates that have been prepaid by the vendor. In addition to council rates, these adjustments may concern water rates, strata body corporate contributions, land tax, and rent.
Step 13 – Settlement
Property conveyancing is complete at settlement, the day the buyer pays the rest of the money for the title, with adjustments taken into account. Your Melbourne property lawyers will do one last search of the title to make sure nothing has come up between the date you exchanged contracts and the settlement.
Step 14 – After settlement
After settlement, the purchaser’s mortgagee will submit the transfer documents to the Land Titles Office. This action will transfer the title from the seller to the buyer. All relevant authorities concerning the property will be notified of the new ownership by The Land Titles Office.
There you have it, property conveyancing explained in a step-by-step process. If any of these steps seem confusing to you, make sure you find experienced Melbourne property lawyers to guide you through the journey.
Not sure how to select a conveyancing solicitor?
Get help with property conveyancing from P&B Law
If you’re new to the process of property conveyancing, you will need a guide to ensure you successfully navigate it.
At P&B Law, we have a team of talented Melbourne property lawyers who can help you secure the property you want to buy.
Talk to us today to get started.