For most people, purchasing a home is one of the most exciting, yet daunting occasions of their lives. At its base it will be one of the most significant financial decisions many Australians will make.
However, the legal process behind the acquirement of property, known as conveyancing, is widely misunderstood and inundated with jargon that can throw many people off.
If you’re planning to buy a house in Australia, understanding the conveyancing process is crucial. In this guide, we break down what conveyancing involves—step by step—to help you make informed, confident property decisions.
- Before You Sign: The Pre-Contract Phase
So, you’ve found the house of your dreams. What next? Sign the contract, right?
Well, not quite. Prior to entering into a contract, buyers should conduct due diligence. This includes:
- Getting a Solicitor or Licenced Conveyancer to review the contract of sale and any pest and building reports;
- Understanding the zoning and planning rules applicable to the property; and
- Arranging necessary inspections.
It is important to look at any future developments in the area to understand if your first few years may be filled with building noises or early morning cranes rather than a peaceful quiet.
It is also crucial to have finance pre-approval in place prior to making an offer. This can reduce any risks of facing an inability to secure a home loan after the contract is made and becomes binding on you and the Vendor.
KEY TIP: Engaging with a Solicitor or Licenced Conveyancer early is critical for a successful conveyance. They will help breakdown any complications and review the contract of sale to make sure you are getting all the required details and are aware of any special conditions or restrictions that may affect the property or your rights as a buyer.
- Signing the Contract: Exchange of Contracts
Once the buyer and seller have agreed on a price and terms, each party will sign a copy of the contract. Mostly, contracts are only legally binding once exchanged between the parties.
In many states and territories such as New South Wales, residential contracts include a cooling-off period, typically between 2 and 5 business days (5 for NSW), during which the buyer can withdraw from the contract (usually with a small financial penalty).
The buyer typically pays a deposit (often 10% of the purchase price unless otherwise agreed) upon exchange of contracts. This is usually held in the vendor’s agent trust account until settlement.
- Between Exchange and Settlement: The Conveyancing Work Begins
Your legal representative that you contracted early will carry out various searches with local councils, water authorities, and land registries to identify any potential issues, such as unpaid rates, planning restrictions, or illegal building works.
If the contract does include special conditions, your legal representative will monitor compliance and advise on any necessary action.
If you are borrowing money, your lender will issue mortgage documents to be signed and returned. Your legal representative will liaise with the lender to ensure everything is ready for settlement.
Prior to settlement, buyers usually have the right to inspect the property to ensure it remains in the same condition as when the contract was signed.
- Settlement: The Final Stage
On the pre-arranged settlement date, your legal representative will coordinate with the seller’s representative and your lender (if applicable) to complete the transaction. The property’s legal title is transferred to your name, and the balance of the purchase price is paid.
Following settlement, the transfer of ownership and any mortgage are registered with the land titles office in your State or Territory.
Once settlement occurs, the buyer is entitled to take possession of the property, unless otherwise agreed.
- Post-Settlement Considerations
To ensure an easy move-in day, arrange to have the following amenities connected or transferred to your name effective from the settlement date:
- Electricity;
- Gas;
- Water; and
- Internet services.
New owners become responsible for council rates, water charges, and any applicable strata levies from the date of settlement.
KEY TIP: Retain copies of your contract, settlement adjustment sheet, and title documents. These may be needed for tax, insurance, or future sale purposes.
Buying a home in Australia involves more than simply finding that right property for you. It is important to be educated on the conveyancing process as it is a structured legal journey that safeguards your interests and ensures the lawful transfer of property ownership.
Seeking out your conveyancing team early can help you understand each phase with greater confidence and peace of mind. Explore Shore Lawyer’s experienced conveyancing team and our expertise in conveyancing matters or contact us at (02) 9712 4244 or email cases@shorelawyers.com.au to discuss how we can help make your property purchase seamless.
