Given soaring property prices over the last few years, it’s natural to feel a sense of relief when your offer on a new home has been accepted.
However, that’s just the start of the process. It can take a frustratingly long time to get the keys to your new property in your hand, while you may well have to navigate several pitfalls along the way.
Conveyancing—the legal process behind transferring ownership of a property from one party to another—typically takes around four weeks to two months, although it can take much longer.
The RBA states that property transactions are among the largest and most significant financial undertakings that many Australians enter into, but understanding the process is the first step to keeping stress to a minimum.
This guide looks at the nuts and bolts around what conveyancing entails, as well as what to look for when choosing a conveyancer and steps you can take to ensure a smooth and successful purchase.
In a nutshell, conveyancing is the legal work involved in buying a property and the transfer of ownership from the vendor—or seller—to the buyer.
It protects the buyer against nasty surprises in the future and ensures they’re aware of any potential issues with the property before they commit to the purchase.
See further down for a step-by-step guide to the conveyancing process.
Either a solicitor or a licensed conveyancer can carry out the conveyancing process. So what’s the difference? Simply that a solicitor is also qualified to carry our other legal services in addition to conveyancing—they just tend to specialise in property.
Both are regulated by their respective professional bodies, carry their own insurance and will carry out the same conveyancing tasks. From here on, we’ll use the term ‘solicitor’ to cover both options.
Conveyancing fees are split into two parts:
It’s important to note that each Australian state and territory is governed by their own individual divisions of the Australian Institute of Conveyancers, and therefore may have different pricing costs and agreements.
In addition, you may choose to take out home buyer protection insurance. This covers you if your purchase falls through for certain reasons, for example, if the vendor pulls out or your property survey reveals major issues. It enables you to claim back some of your upfront costs, such as valuation, conveyancing and mortgage arrangement fees, subject to limits.
This insurance has to be bought before, or within a certain period (usually a week), of instructing a solicitor to act on your purchase.
Upon settlement, you’ll also be required to pay stamp duty upon purchasing a property, which again varies state-by-state. The timeframe required to pay stamp duty also varies depending on your region.
While it’s not a legal requirement to hire a solicitor, if you are buying with a mortgage, it will be required by the lender for its legal work.
If you choose to find a solicitor, it’s worth taking the time to find a good one, rather than simply the cheapest option. You may consider the following:
Some solicitors will charge a flat fee—you can provisionally fix this amount upfront—while others charge an hourly rate based on the time they spend on your purchase. Even a fixed fee may change if the legal work becomes more complex than expected, but your solicitor should provide advance notice of this.
Some companies offer a ‘no purchase, no fee’ arrangement, where you’ll pay a small fee upfront, with the balance on completion. However, the overall conveyancing fee is generally higher than for a standard fee arrangement.
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Conveyancing is important as it ensures that both buyers and sellers are in the best position when it comes to transferring property ownership. By using a conveyancer, the parties can remove themselves from the many legalities and obligations.
In 2014, the RBA introduced new functionalities to support near real-time settlement of property transactions via electronic solutions, replacing the traditional paper-based process.
E-conveyancing minimises settlement risk for the transfer of property ownership, while also ensuring that the property settlement process remains secure, reliable and efficient.
While the pre-contract phase can take as little as two weeks to complete, with a draft contract even potentially being created within two to ten weeks, it’s highly unlikely that the entire conveyancing process would be finalised this quickly.
The various legal, financial and administrative tasks that the solicitor needs to complete can take between one and four months.
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