FROM THE BLOG

Buying or selling property can be a complex and legally intricate process, particularly in Victoria. At the heart of every property transaction lies a critical element known as conveyancing. In this blog post, we’ll explore what conveyancing is and why it’s essential for a successful property transaction.

What is Conveyancing?

Conveyancing is the legal process of transferring ownership of real estate from one party to another. It involves a series of legal and administrative steps that ensure the property’s title is transferred accurately and legally, protecting the rights of both the buyer and the seller. Conveyancing plays a crucial role in property transactions by providing transparency, legality, and protection to all parties involved.

The Conveyancing Process: Step by Step

1. Pre-Contract Stage

• Conveyancer: The first stage in the conveyancing process whether buying or selling a property is to contact a conveyancer to either review and provide advice on the sale documents for the property, or to prepare the sale documents on the property.
• Buyer Due Diligence: In most cases, the property is sold ‘as is’. As such, a purchaser must undertake due diligence and ensure they’re satisfied in respect of the property. Purchasers may also obtain necessary reports such as building and pest inspections prior to signing any contract, or make any such contract subject to the inspections.
• Negotiations: If any issues or concerns arise during the inspections or due diligence, negotiations between the parties may occur in addition to negotiating the purchase price, deposit amount and settlement date.

2. Contract Formation

• Signing the Contract: Once both parties agree to the contract terms, they sign it, and it becomes legally binding. The buyer pays the agreed deposit, typically around 10% of the purchase price.
• Cooling-Off Period: In some cases, the buyer may have a limited cooling-off period during which they can withdraw from the contract, usually within three business days. This period does not apply to auctions.
• Contingent Conditions: If the purchaser is reliant upon finance to complete the purchase or there are any special conditions such as building and pest inspections which need to be satisfied, they will then arrange for the appropriate inspection or bank valuation to be undertaken.

3. Pre-Settlement Stage

• Conveyancer’s Due Diligence: The buyer’s conveyancer conducts property searches and inquiries to ensure the vendor’s disclosures were accurate and confirm the property’s legal status and ownership. The extend of inquiries will vary from conveyancer to conveyancer, with more experienced conveyancers having a better understanding of what additional enquiries need to be made.
• Bank Requirements: As part of the conveyancer’s role in arranging for settlement, they will contact the client’s bank to provide copies of any documents required by them or organise the discharge of mortgage, and book a time for settlement. A buyer will also need to sign and return any loan documents to their bank in readiness for settlement.

4. Settlement Stage

• Final Inspection: The buyer conducts a final inspection of the property to ensure it is in the agreed-upon condition.
• Settlement Statement: The conveyancer prepares a settlement statement, outlining the funds due for settlement, including the balance of the purchase price, adjustments for rates and taxes, and any fees.
• Settlement: On the agreed settlement date, the buyer’s and seller’s representatives exchange documents and funds. The property title is transferred to the buyer, and the seller receives the sale proceeds.

5. Post-Settlement Stage

• Change of Ownership: The conveyancer is responsible for notifying relevant authorities, such as local council, water authority and any owners corporation, of the change in property ownership. The buyer and seller are responsible for notifying their respective electricity, gas and internet providers of their connection/disconnection of services.
• Finalising Legal Documents: The buyer’s conveyancer ensures that all legal documents are properly recorded and filed and provides a copy of the new title search to the purchaser.

Why is Conveyancing Important?

Conveyancing is essential for several reasons:

1. Legal Compliance: It ensures the transaction complies with all relevant laws and regulations.
2. Property Title Verification: It confirms the property’s legal status and protects buyers from undisclosed encumbrances.
3. Protection of Rights: Conveyancers protect the rights and interests of both buyers and sellers, addressing disputes and negotiating on their behalf.
4. Financial Accuracy: Conveyancers ensure that funds are transferred correctly, including payment of stamp duty and other fees.
5. Peace of Mind: With a professional overseeing the process, buyers and sellers can have confidence in the legality and transparency of their property transaction.

In summary, conveyancing is the essential legal process that facilitates property transactions and ensures the rights of both parties are protected. Engaging the services of an experienced conveyancer can help you navigate the complexities of property transactions in Victoria, ensuring a smooth and legally sound process from start to finish.

Further information on buying or selling property can be obtained from the State Revenue Office website here: https://www.consumer.vic.gov.au/housing/buying-and-selling-property or by contacting ConveyancingX.