The steps during a standard conveyancing process are:
- Preliminary Steps
If you are selling your house your preliminary steps will involve getting your house ready for sale and finding a Real Estate Agent to assist you with that process. If you are buying a property you will be out and about inspecting properties to find the property that is suited to your needs. There will be inspections of the property. You may decide to undertake building and pest inspections at this time. You may decide to speak with your bank if you are buying a property to have preliminary discussions about how much you can borrow to complete your contract.There will be discussions in which the Real Estate Agent acts as an intermediary between the buyer and seller.
- Entering into a Contract for sale
When you have reached agreement about the sale / purchase of the property the Real Estate Agent will usually draft the contract. Both parties to the contract generally nominate a solicitor to act for them in the conveyancing for the contract. You will generally be required to pay a deposit to the Real Estate Agent on the signing of the contract. We recommend seeking legal advice before you sign the contract though that is not always possible. See further below under “When should I speak to a lawyer?”. You should notify your bank if you are purchasing that you will need formal finance approval. If you are selling you should start to take steps to notify any bank which will need to release a mortgage over the property.
- Carrying out the terms of the Contract
During the conveyancing process the steps taken by a seller and buyer will be different.
Seller: You will need to notify your bank if there is a mortgage over your property straight away so that they can begin the process of preparing the mortgage for release at settlement. This process takes some time as banks have internal processes which must be followed. The earlier you can undertake this process, the smoother your settlement will be. You should ask your bank for a form which is usually called “Request to Discharge / Release Mortgage”. This form should be completed and signed by all mortgage holders. You should note the details of your conveyancing lawyer on this form so that the bank has authority to liaise with your lawyer and organise settlement.
The agent will liaise with you to arrange access to the property for any building and pest inspection along with any pre-settlement inspection. You will also need to arrange removalists to ensure that the property is vacant at settlement.
The buyer’s lawyer will prepare transfer documents in preparation for settlement and you will need to sign those before settlement on the promise by the buyer’s lawyer to hold onto those transfer documents pending settlement.
Buyer: You have a 5 day cooling off period within which to consider whether the purchase of the property is what you had intended. You should seek legal advice about your rights and obligations during this time. As buyer you have much to do to satisfy yourself about the property. You should, if you haven’t already, organise a building and pest inspection to occur. This will be arranged with the Agent at the convenience of the seller.
You should, if you haven’t already, immediately provide a copy of the contract to your bank or finance broker to assist you with any finance requirements you have. You should arrange insurance for the property you are purchasing.
Your conveyancing solicitor will talk with you about searches which should be undertaken on the property. This process allows you to satisfy yourself that good title to the property will be available on settlement. Searches should be conducted straight away. Here you should search various government and body corporate records to ensure that there are no encumbrances or defects on the property that were not mentioned in negotiations or on the contract, and that the property is how it appears.
You will need to advise the seller, through your conveyancing solicitor, that you have satisfactory building and pest inspections and satisfactory finance if these are conditions on your contract.
Once your finance is approved you will need to urgently sign loan documentation with your bank, within plenty of time to allow settlement to occur in accordance with the contract terms. You should note the details of your conveyancing lawyer on any bank documentation so that there are no difficulties when it comes time to book in your settlement.
There will be transfer duty payable on the contract. This is payable by the buyer. Your conveyancing lawyer will advise you about the amount of duty payable and when the duty is payable.
Prior to settlement the buyer’s lawyer will prepare transfer documents in anticipation of settlement. These will be sent to the seller’s lawyer on the promise by the buyer’s lawyer to hold them pending settlement. Your lawyer will stamp the transfer documents in accordance with the assessed transfer duty amount.
There are likely to be other steps to be taken by either a buyer or a seller. Your conveyancing lawyer should point you in the right direction to make sure that your transaction goes as smoothly as possible.
At settlement your bank and your lawyer, or their agents for both the buyer and seller will meet at a mutually agreed location, usually the agent for the bank which is releasing a mortgage (the seller’s bank). The seller’s bank will hand over a release of mortgage document, in exchange for a bank cheque in favour of the mortgage to be released. The buyer’s bank will receive the release of mortgage from the seller’s bank. The buyer’s bank will also receive the transfer documents from the buyer’s lawyer. Other cheques may have been requested which cover any outstanding rates or utilities, agent’s fees or legal costs for conveyancing. These will be collected by the party which requested the cheques be available.
- After Settlement
The buyer’s bank will arrange to lodge documents to transfer the ownership of the property from the seller to the buyer. The bank will lodge, the release of mortgage, the transfer document and then any new mortgage. The bank will receive confirmation of the change in ownership of the property. Notification to the local city councils for rates is automatic upon the registration of the change in ownership. You will see a change in ownership appear on your next rates notice, or the council might write to you to confirm the change. If you are purchasing a unit, as buyer your solicitor will need to lodge a form with the body corporate for the unit to confirm that ownership of the property has changed.
All of these steps have certain legal requirements or sub-steps that further dictate the process. Missing any of the required steps or deadlines can cause delays in the conveyancing process and significant problems (including termination of the process). If you have further questions about the conveyancing process, please contact our office on (07) 3343 9522 or (07) 5446 1745 or through our contact us service here