The Conveyancing Process - A Step by Step Guide
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Buying, selling, transferring or subdividing property isn’t an everyday occurrence for most people and knowing what to expect from the conveyancing process can seem like an overwhelming feat. It doesn’t have to be so complicated, though, and with the help of an experienced conveyancer or solicitor in Cairns who specialises in property, you can rest assured the conveyancing process is under control with very little input required.
The conveyancing process typically follows the steps below.
The Contract of Sale
The vendor will request their conveyancer or solicitor to prepare a Contract of Sale. The vendor should be ready to discuss any specific terms they have, such as inclusions or exclusions they intend to leave at the property or take with them.
The terms of a contract can be negotiated. This is usually done through the real estate agent or between the buyer and seller if there isn’t an agent involved. A conveyancer or solicitor will provide the agent with any special conditional clauses required for the contract, and if there isn’t an agent involved, then the seller’s solicitor will usually prepare the contract. Once all of the terms of the sale have been reviewed, agreed and signed by both parties the contracts are ready to exchange.
Once each party has the other’s signed contract, the contracts are considered exchanged and legally binding. The purchaser is usually expected to have paid an initial deposit by this stage.
The deposit typically represents a small sum up to 10% of the purchase price, which lets the vendor and agent know that the purchaser is serious about buying the property.
The ‘cooling-off’ Period
After you sign a contract, the cooling-off period comes into effect. This is the period of time in which either party may still legally back out of the purchase. Purchasers should keep in mind that they may still be required to pay the vendor a small percentage of the deposit if they do cancel the purchase. In Queensland, this can be up to .25% of the purchase price.
If the property was purchased at auction the cooling-off period will not apply.
Building & Pest and Finance
During this period, the purchaser’s solicitor or conveyancer will recommend that they undertake a building and pest inspection to ensure the property is of sound structure and does not have any live termites.
This time should also be used to confirm that a bank loan has been fully approved.
Stamp duty (also known as transfer duty) is a one-off tax that is applicable to property purchases and transfers.
You can calculate how much stamp duty you will need to pay here.
If you are a first home buyer, you may be eligible for a stamp duty concession.
The next steps will be undertaken by a conveyancer or solicitor and may not require any input from either party if the settlement is an electronic one. Purchasers and/or vendors may be required to sign some extra forms, such as the transfer document if your settlement is a paper settlement.
If a solicitor or conveyancer requests any documents be signed or provided, it is important that it is attended to promptly to keep the process moving along in time for settlement.
Mortgage Payout Figure
The vendor’s solicitor or conveyancer will work with the bank to ascertain the amount left owing on any mortgages. A break fee may also be applicable.
The buyer’s conveyancer or solicitor is responsible for calculating the adjustments of payments such as council rates, water rates and strata levies up to the settlement date. If there is a tenant in the property the purchaser’s representative will ensure rent has been paid up-to-date.
Once completed and agreed upon, these are signed off by the vendor’s solicitor or conveyancer.
Any outstanding monies will be adjusted at the time of settlement and will be paid out of either the vendor’s proceeds or the purchaser’s available funds, depending on which party the adjustments favour.
Conveyancer or solicitor’s fees will normally be paid at settlement too.
Conveyancers or solicitors will work together to book settlement and will confirm the date and time with their clients, including any changes to the booking time or date.
It usually takes anywhere from 15 minutes to half-an-hour for settlement to complete once all of the financials are balanced and signed off.
Once this has occurred the property has been transferred, and the solicitor or conveyancer will usually inform their respective clients that settlement is complete.
If you are purchasing or selling a property in Cairns, contact Cairns Conveyancing Solicitors today.