What is Conveyancing?
‘Conveyancing’ is the legal term used to describe the transfer of land ownership. ‘Transfer’ can occur by the sale or purchase of land, by a court order or upon the owner’s death.
What does it involve?
For the seller?
- To sell land, the current owner (seller) must have a contract containing documents regarding the land and the owner’s title to that land.
- The seller must pay for the preparation of this contract by a solicitor or licensed conveyancer
- The seller must also pay the fees due to the real estate agent who is retained to sell the property
For The Buyer?
- It is wise for people thinking of buying a property to undertake reports such as pest, building, survey or valuation regarding the property to avoid nasty surprises later
- Once the buyer enters the seller’s contract (known as ‘exchange’ which may also be by auction), the buyer is bound to purchase the property. Only exceptional circumstances will allow the buyer out of the contract after exchange.
What can go wrong?
- The owner going bankrupt
- Part of the buildings being built over the boundary
- Council or other government notices or charges (such as rates and land tax) issuing against the property.
- Part of the building being damaged after the contract is entered
How long does it take?
A normal transaction for the sale of land will take 6 weeks. The time period is negotiated at the start, before ‘exchange’. After six weeks from the exchange, the purchaser must pay the balance of the money under the contract. This date is known as ‘settlement’ or ‘completion’.
Conditional contracts
Some contracts can be conditional upon certain things being done such as the subdivision of part of the land, the building of a structure or the removal of some defect on the owner’s title.
If a buyer is borrowing money to acquire the property the requirements of the lender (often a bank) will have to be satisfied.
If conditions are not met in time, settlement can be delayed. In that case, the purchaser will normally have to pay interest on the balance of the money from the scheduled completion date until the day completion occurs.
What does it cost?
The Seller must pay:
- Real estate agency fees
- Reimbursement to the buyer for the cost discharging an existing mortgage
The Buyer must pay:
- Government stamp duty on the contract and on any mortgage to a lender (see the stamp duty calculator)
- Consultant’s fees such as a surveyor, building, pest or strata expert.
Each Party must pay their own legal costs
