- November 30, 2017
- Posted by: Aman Singh
- Category: Uncategorized
Before we go ahead with all the nitty gritty details of conveyancing in Victoria, let us first understand what conveyancing is.
When we talk about conveyancing, it refers to the sale of real estate from a seller to a buyer. The entire process can also allude the the process wherein a mortgagor provides mortgage to a mortgagee. The completion of the conveyancing process can take up to four to five weeks.
How the Conveyancing process works
Conveyancing differs, depending on whether you want to buy or sell a property. So, if you are buying a property, conveyancers ensure that the seller has the right to do so. This is called a title search. Other than that, conveyancers also do the following other things.
- They examine the seller’s contract and communicate the key terms
- They watch over key dates and deadlines
- They act as a mediator between you and your financier to ensure that enough funds are ready for the settlement period
- Conveyancers help to arrange for payment of the stamp duty
- They attend settlement on your behalf to obtain the property title.
In case of sellers a conveyancer works in a different way. In this case, conveyancers-
- Ensures that buyers conform to the contract terms and conditions
- Assure the deadlines are met and payments are made on time, completely
- Organize the payment of any mortgages on the property
- Watch over your settlement for you
- Prepare the final settlement statements
- Inform the authorities of your sale.
Here are the steps involved in conveyancing that can help you you understand how the process works. An important point to remember is that when planning to buy a property at an auction, a purchaser is bound to purchase the property after having made the highest bid at the end of the auction.
Hence, it is important for the seller to take advice from a conveyancer to examine the sale contract prior to the auction to ensure that everything is alright. It is also important that a potential purchaser has finance arranged and that all necessary property inspections have been done.
#1 Contract of sale
The first step involves the creation of the contract of sale. This is one of the most important legal document, which if not prepared properly can be reason for dispute between vendors and purchasers. Generally the contract of sale must contain specified documents, certificates, and disclosures
#2 Make an offer
The second step is making an offer to a seller over a chosen property, to purchase it. The seller can accept the offer or they can enter into negotiations with the buyer over the price and conditions of the sale.
#3 Paying a deposit
Once negotiations are in place buyers can choose to pay an initial deposit to show that they are really interested in purchase of the property. This amount may vary and will generally be stipulated by the seller or conveyancer and is simply a step to show that the seller is serious about their offer as well. It is not a binding contract and neither is the property removed from the market.
#4 Evaluation of Risks
It is the seller’s responsibility to check for any damage in the property up until settlement or completion of the sale. Yet, in this stage, the buyer can be prudent by insuring the property from exchange of contracts if they are unsure whether the vendor has a current insurance policy.
#6 Exchange of contracts/paying a deposit
In Victoria, the vendor and purchaser each sign one copy of the contract and then the real estate agent acts as the middleman who exchanges these copies between both parties. The exchange of contract
#7 Cooling off period
After exchange of the contracts or a deposit is paid, the buyer may take time to “cool off”. If a cooling off period applies, the buyer can revoke the contract before the end of the cooling off period. At auctions, cooling off does not apply.
#8 Transfer of property
The purchaser’s conveyancer must prepare a transfer document, have the purchaser sign it, and pay any stamp duty for the document’s registration. The purchaser’s conveyancer must then send the transfer to the vendor’s conveyancer for the vendor to sign. This is often a requirement of the purchaser’s financier, so that it can register the transfer and its mortgage promptly. This means that the purchaser must arrange to provide their conveyancer with the stamp duty amount prior to settlement, or arrange for stamp duty to be paid at settlement. It is not possible to defer the payment of stamp duty on the transfer.
#9 Time for completion
The time for completion can be set by agreement between the parties. If purchases are “off the plan” it can be quite lengthy. The reason for this can be because the contract can only be completed after the building construction is complete and new titles are issued. These periods can be changed by agreement between the seller and the buyer.
Once the exchange process is complete, the buyer’s conveyancer will send a list of formal questions about the property, known as “requisitions”, on title. Requisitions are obtained from the vendor information that may not have been previously disclosed or discovered during inspection of the property. In Victoria, requisitions on title have been replaced by warranties in the contract. The vendor’s solicitor/conveyancer will reply to these requisitions.
#11 Outgoing mortgagee
If the vendor has a mortgage over the property, the mortgagee must be contacted to provide a payout figure and attend at settlement to hand over a discharge of mortgage and, often, the certificate of title/title deed.
At settlement, adjustments like council rates, water rates, strata body corporate contributions, land tax, and rent will be made.
#13 Pre- Settlement
The sale is said to settle or complete on the day the purchaser pays the balance of purchase money, to the vendor. On the day of settlement, it is important for the conveyancer to obtain a final search of the title to ensure that the property is clear from any interest or restrictions that may have been recorded between the date of exchange and settlement.
#14 Post- settlement
The purchaser or the purchaser’s mortgagee will register the transfer documents with the Land Titles Office. The transfer documents will consist of –
- discharge of any existing mortgage
- withdrawal of any existing notice
- Transfer of title from the vendor to the purchaser
- mortgage from the purchaser to the new mortgagee. The Land Titles Offices advise the relevant authorities like the local council, water authority, and Valuer General’s office that the property has a new owner.
Whether you plan to buy or sell a property, a conveyancer’s role is to represent your interests throughout all the stages. When representing a buyer, a conveyancer’s work is to prepare and lodge all legal documents like the contract of sale. A buyer’s conveyancer will also deal with the financial areas, including the placing of any deposit into a trust account, and undertake any adjustment calculations involving both taxes and rates.
When representing the person or entity selling a property, a conveyancer will finish all necessary legal documents and respond to any questions about the title, and deal with key matters such as a buyer’s request to extend dates.
Conveyancing keeps you, a buyer or a seller, away from all complications of the buying and selling process. Hence, it’s always advised to contact a knowledgeable conveyancer for your property related matters.