Whether you are buying or selling residential property, there are many legal and practical issues to consider, and several steps involved in a conveyancing transaction.
Conveyancing is the process of transferring title of a property from one owner to another. Unlike many legal matters, most conveyancing transactions are completed quickly, and important issues governed by over 20 pieces of State and Federal legislation, may be overlooked. Accordingly, we recommend that all potential buyers and purchasers see a lawyer before committing to this large financial transaction.
If you are buying…
Unless you are a cash buyer, it is important to have pre-approved finance (finance subject to valuation), so you can move forward once a suitable property is found. You should not enter a contract without formal finance approval or a special condition allowing you to rescind (cancel) the contract within a reasonable time if finance is not approved.
The contract for sale sets out the legal obligations of each party and must include accurate title particulars and details of any encumbrances affecting the property. The seller must make certain disclosures in the contract regarding matters such as compliance with swimming pool, electrical safety and smoke alarm regulations, whether the property is subject to an environmental protection order, and details of recent renovations, building work and relevant insurances.
Most standard contracts include optional provisions making the purchase subject to formal finance approval, satisfactory pest and building reports and / or the issue of a pool safety certificate. A contract should be reviewed to ensure it is compliant with statutory requirements and includes rescission terms necessary for your protection.
When you are comfortable with the property and conditions, and finance is formally approved, contracts may be signed and exchanged. The deposit will need to be paid to the agent or seller’s legal representative and immediate insurance cover for the property should be organised.
Generally, buyers purchasing a residential home have statutory cooling-off rights allowing them to rescind the purchase within five business days of receiving the signed exchanged contract. In this case, a buyer avoids any obligations under the contract but will forfeit 0.25% of the purchase price even if a Deposit has not been paid. Cooling-off rights do not apply in some circumstances, such as purchasing under auction conditions, or may be waived or shortened by agreement.
After contracts are exchanged additional searches and enquiries are usually recommended and ordered by your lawyer.
Throughout the conveyancing process, communication with the lender takes place to ensure that borrowed funds will be available in time to complete your matter.
A final inspection of the property is arranged through the agent before settlement to ensure that it is neat and tidy, all items removed and in the same condition as when it was inspected.
Settlement of your purchase may take place physically, where your legal and bank representatives meet to exchange cheques and title documents, or on-line through electronic conveyancing processes.
If you are selling…
The first step in selling your property is to understand your legal obligations and have a contract prepared that meets the prescribed disclosure requirements. Incomplete or incorrectly prepared contracts can lead to confusion or may enable a buyer to pull out of the sale, so it is important to have everything in place from the start.
The contract must include accurate title details of the property and specify all encumbrances. Sellers must also give certain warranties regarding the property and disclose matters concerning compliance with various regulations. Every property is different, and in some instances, it may be necessary to have special conditions drafted to deal with anomalies and meet your disclosure obligations.
Once a sale has been negotiated the contract is completed with details of the buyer and purchase price together with any additional conditions that have been negotiated.
After contracts are signed and exchanged, any contingent conditions satisfied and the statutory five-day cooling-off period either waived or expired, the parties are committed to the agreement.
Settlement is usually arranged around 45 days after contracts are exchanged however shorter or longer settlements may be negotiated.
If there is a mortgage, the lender is notified so arrangements can be made to release its security over the property on settlement.
Our team of property and conveyancing professionals have assisted many clients with the sale and purchase of real estate. We will explain the contract and steps involved in plain English, negotiate conditions if necessary, identify risks and recommend investigations to protect your legal interests.