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If you’re a homeowner in Australia, then you’re probably aware of the conveyancing process, but for those who are new to it, here is a guide to what it is and what happens during this important step in buying your first home.
Conveyancing is the legal process of transferring the ownership of property from one person to another. It can be a complex process, so it’s important to have an expert handle it for you. In this article, we will explain the basics of conveyancing so you can ensure your settlement runs smoothly.
The conveyance stage of a property settlement is undertaken by both the seller and the buyer of the property and usually involves a conveyancer or a solicitor.
Here are some of the key steps involved in conveyancing, which include:
- examining the contract for sale
- arranging building and pest inspections
- examining a strata inspection report (if the property is in a strata scheme)
- exchanging the contract of sale
- paying the deposit
- arranging payment of stamp duties
- checking if there are outstanding arrears or land tax obligations
- finding out if any government authority has a vested interest in the land or if any planned development could affect the property
- finding out any information that may not have been previously disclosed, such as a fence dispute or illegal building work
- calculating adjustments for council and water rates for the property settlement
- overseeing the change of title with the relevant government authority
- completing any final checks prior to settlement
- attending settlement.
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Employing a professional
Conveyancers are not necessarily solicitors; however, solicitors can double as a conveyancer. With the correct qualifications, both are able to convey property. In Australia, a conveyancer is a licensed professional with the legal qualifications necessary to convey property.
Solicitors, on the other hand, study conveyancing as part of their law degree, and once qualified as a solicitor, they are allowed to provide legal advice during your journey of purchasing a home, which conveyancers are not allowed to do. This can be a critical distinction for many homeowners because, in the unfortunate circumstance that legal complications arise, you may require legal advice, so it would pay to have engaged a solicitor already.
When choosing between a solicitor and conveyancer, consider:
- Solicitors can generally cost more than conveyancers.
- A conveyancer is generally an expert in all the formalities of transferring the ownership of a property. However, solicitors have a broader knowledge of the law and can provide assistance if issues arise outside of your conveyance transaction.
One final option is to handle the conveyance process by yourself. This do-it-yourself (DIY) option is made easier with the availability of DIY kits, but you need to be aware that mistakes can be extremely costly. Whilst DIY conveyancing can be a way to save on costs, conveyancers and solicitors must be covered by professional indemnity insurance in case any mistakes are made. To take on the conveyance of a property yourself would mean you aren’t covered by the same level of insurance. It’s worth considering employing a conveyancer or a solicitor to avoid the risk of lodging legal documents incorrectly, which could ultimately lead to the transfer of property being voided.
What are the costs involved?
Fees naturally vary between solicitors and conveyancers, but you also have to be aware of costs and disbursements associated with the conveyancing process. Here is a general idea of the types of legal fees involved in conveyancing:
- a title search
- certificate fees charged by authorities with responsibility for water, electricity, roads, schools etc.
- registering the mortgage
- registering the transfer.
The costs associated with conveyancing outside of general legal fees and disbursements will normally include:
- building and pest inspections
- survey report
- establishment of mortgage
- home building insurance
- valuation fees
- mortgage insurance
- stamp duty
- levies, if the property is in a strata or community scheme
- council and water rates.
While conveyancing may seem like a daunting task, it is a necessary step in ensuring the smooth transition of ownership of your new home. With the help of a conveyancer or solicitor, you can be sure that all the necessary steps are taken care of so you can enjoy your new home worry-free!
If you want to start exploring for a conveyancer, do your research! You can locate a conveyancer near you by heading to the Australian Institute of conveyancers and navigating to your relevant State’s search function.
Do you have any questions about conveyancing? Let us know by reaching out to us today to discuss your circumstances and the best way forward for you.