Buying a dream home is an exciting and significant decision to make. At the same time, it is an overwhelming experience as new home buyers must complete various documents that may be unfamiliar to them. In fact, either a solicitor or a licensed conveyancer can assist a new homeowner to make the transfer of the property happen. In this article, the 7-step process of conveyancing and the role of a conveyancer will be explored.
Step 1: Reviewing a Contract and Transfer Documents
A conveyancer or a property lawyer usually review the contract of sale before it is signed to identify any unusual clauses, errors, and red flags where necessary. They also review all other relevant transfer documents and keep the client informed of any changes made. At this stage, a conveyancing professional can negotiate on behalf of the client and ensures that the contract is fair in favour of the client.
Step 2: Identity Verification and Searches
Buying a property means the transfer of official ownership of the property. The identity of the new owner must be verified so that the title deed goes to the right person. A conveyancing professional will send the new homeowner a Land Title Verification of Identity form to complete and assist them to prove their identity by using their passport or birth certificate, as well as a driver’s license or identification card.
Before signing those ownership documents, a conveyancing professional can perform their due diligence. This means that they will conduct a proper investigation to see whether there are any legal issues associated with the property such as debts or liabilities attached to the property. This is important because if the property subject to transfer has any debts or liabilities, they get transferred to the new owner once the legal ownership is transferred. A good conveyancing professional oversees all the relevant searches into a property before the transfer of ownership. The example of legally allowed searches are as follows:
Title Search
• To ensure whether the seller is the legal owner of the property
• To check the financial situation of the property (any debts or liabilities)
Local Authority Search
• To confirm whether there are any plans to develop the land in the future
Disaster Risk Check
• To check the potential risk of natural disasters such as floods and bushfires
Structure Check
• To check if the structure is strong and how well it will serve your housing needs
Pest Report
• To check if the area is prone to pests and rodents
Strata (For apartments)
• To check if the building is operating on a deficit or it can sustain its operation
Step 3: Exchange of a Contract
A conveyancing professional prepares all the legal documents and liaises with a real estate agent to make sure the purchaser has rightful ownership of the property. They also check the legality of any documents before the parties sign and exchange the contract to avoid potential errors in the legal documents. If there are no defects or associated risks that can be found, a purchaser signs the contract, and it is exchanged. It will become the legally binding agreement between the purchaser and the seller. A licensed conveyancer or solicitor can do all the legal work with the contract and help the purchaser decide if they want to proceed to purchase or not.
Step 4: Finance Approval
Next, a new homeowner needs to get all the finance sorted and ready. If they have a loan from a bank, it must be ensured that the funds are available for settlement. If there are any fees such as stamp duty or adjustments on the payment, the conveyancer or solicitor will calculate them thoroughly. While a conveyancing professional will not have access to the banking details of their client, the client has to make sure that any necessary documents are delivered to a financial institution to authorise the final payments. To make it more convenient and simpler, many conveyancing professionals use PEXA which means settlement can happen electronically for everyone involved. PEXA allows the funds to be paid automatically and quickly.
Step 5: Arranging Pre-settlement Inspection
Before everything is finalised on settlement day, a purchaser can ask their conveyancer or solicitor to arrange an inspection of the property to make sure nothing dramatic has changed since the exchange of the contract.
Step 6: Settlement
On the settlement day, everything becomes official – signed, sealed, and delivered. Licensed conveyancers can handle the settlement process by booking dates and they can also liaise with their client’s financial institution to ensure the funds are ready to be transferred on the settlement day without delay. They also make sure that all documents have been lodged with the Land Titles Office.
Step 7: Post-settlement Letter and Documents
At this final stage of conveyancing, all final paperwork is delivered, and the purchaser becomes the official owner on the title deed. All the important and permanent documents are to be kept in a safe place.
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