Conveyancing Frequently Asked Questions

CONVEYANCING FAQ – NSW

Anyone buying or selling a property must use the conveyancing process. But what exactly does this entail? Anybody buying or selling property for the first time can be a little bit confused by all the jargon, but here are the hard and fast facts about conveyancing in NSW.

Here, we provide all the answers to our most Frequently Asked Questions about conveyancing.

The title to a property refers to its legal ownership as registered with the Land Titles Office.

Conveyancing describes the legal process of transferring the title of the property between the buyer and the seller. The conveyancing process can begin before signing the contract for sale, and continue all the way through settlement (the time that the title of the property is transferred in exchange for the purchase price) to the post-settlement notifications that are required to be made to relevant authorities.

Conveyancers are qualified practitioners specialising in legal aspects of selling and buying property, who are able to provide expert advice in regard to conveyancing and property law.

A written legal document which documents all terms relating to the sale of the property. It can be supplemented by Special Conditions as agreed by the parties.

It means a binding contract has been created between a buyer and a seller. At exchange the seller typically pays a 10% deposit of the purchase price. A five day cooling off period begins following exchange, which can be waived by the buyer.

Searches are a vital part of buying or selling a property, providing evaluation and identification of any property, legal or ownership issues in the conveyance. In most conveyancing contracts, the standard terms allow for the buyer to have particular rights, such as regarding termination or compensation. Skimping on searches can be costly in the long run, so we always advise our clients not to try to minimise the amount of searches that are required.

The transferring of the title to a property in exchange for the purchase price is known as “settlement” and occurs on the Settlement Date. On this day, the buyer receives a signed transfer for the title of the property from the seller in return for providing the purchase price (less the deposit) as a bank cheque and results in finalisation of the sale or purchase process.  This is done via the parties’ lawyers as the buyer and seller themselves are not usually required to attend.

Properties are subject to external charges like water usage, body corporate fees or council rates. The charges usually cover a particular time period which does not necessarily coincide with settlement, so the charges need to be pro-rated for the relevant period and this may result in an adjustment of the purchase price which needs to be incorporated into the contract.

After settlement, the transfer forms are lodged with the Land Titles Office to register the change of ownership, in a process that also triggers automatic notifications to local government authorities.

Most conveyances take 4 to 6 weeks after contracts are signed, with the transfer of title then usually taking another 1 to 2 weeks to register. However, it is possible to negotiate shorter settlement terms before signing your contract.

Contract Date:

This is the date when the last party signs the contract and the contract becomes effective. Other dates are often expressed by reference to the Contract Date (eg. “30 days after the Contract Date”).

Finance Date:

This is the date by when the buyer must have advised the seller whether or not finance approval has been achieved.

Building and Pest Inspection Date:

This is the date when a buyer must have advised the seller whether or not they have obtained the requisite building and pest reports.

Settlement Date:

This is the date when settlement takes place (unless otherwise agreed by the parties).

All licensed conveyancers are covered by professional indemnity insurance, meaning consumers are covered if the conveyancer makes an error which causes you a loss.

The standard terms in a conveyancing contract will involve the purchase price, proposed Settlement Date (and other dates of relevance), and contract conditions.

A party (typically the buyer) can terminate the contract without defaulting under provisions known as the conditions to the contract. In a standard contract these conditions are the finance condition and the building and pest condition.

The finance condition allows the buyer to attempt to secure finance approval by a specific date. If the finance is approved, the condition is satisfied and the conveyance proceeds. If the finance is not approved, the buyer is able to terminate the process and have their deposit refunded.

Another condition in a standard contract is the building and pest inspection. This is the physical inspection a licensed builder performs, reporting to the buyer any defects. If the buyer is (reasonably) unsatisfied with the outcome of the inspection, again the buyer can terminate the process and have their deposit refunded. Buyers often use a negative report to negotiate reductions in the sale price by amounts needed to repair any defects that were identified.

Sometimes, particular circumstances will require extra terms to be added to a contract for sale, and these are known as special conditions. On reviewing your contract prior to signing, your conveyancer will identify whether any special conditions exist which may require drafting extra conditions.

As a guide, these are some of the expenses typically incurred when buying a property.

  • Fees and charges payable for obtaining any loan (mortgage);
  • Stamp/transfer duty;
  • Registration fees to be paid to the Lands Titles Office;
  • Cost of searches;
  • Payment of rates and taxes for the period the buyer will own the property;
  • Conveyancing fees and ancillary costs; and
  • The expense of moving house.

Your conveyancer will advise you of any other specific expenses you will need to anticipate.

When selling a property, the following costs and charges may apply:

  • Loan/mortgage repayments;
  • Fees and charges payable to discharge a loan (mortgage);
  • Sales commission and advertising costs payable to your agent;
  • Cost of searches;
  • Payment of rates and taxes for the period the seller owns the property;
  • Conveyancing fees and ancillary costs; and
  • The expense of moving house.

Conveyancing fees vary widely, as do the fees for any professional service. The fees will depend on many factors including whether additional work or services are needed to be performed. Make sure you discuss with your conveyancer what their quote covers and what services may attract an extra fee.

Buyers should expect a more complicated process than sellers, because there is usually more work and advice involved in buying a property (for example, monitoring finance or other conditions). More searches are also required to be performed. For these reasons, conveyancing costs for buyers are usually higher than for sellers.

When buying a unit, the process is more complex because when buying into a strata plan, a body corporate is typically involved. The conveyancer will need to advise you on issues in respect of the body corporate and advise what exactly you will own if buying a unit in a strata scheme. Buyers need to conduct additional searches relevant to strata plans, and there are also additional notifications to be made after settlement.

Stamp duty (sometimes known as transfer duty) is paid by the buyer within 30 days of settlement. It varies by state or territory and is based on the purchase price. Concessions are available for particular kinds of buyers, like first home buyers.

According to the Australian Institute of Conveyancers, while it is legal and obviously convenient to use the same conveyancer, it is not usually recommended because of the risk of conflicts of interest arising along the way.

When you utilise “fixed fee conveyancing”, you are quoted a single fee covering all searches and work required to complete the conveyance (excluding any specific extra requests falling outside the usual scope of a conveyance). When comparing “fixed fee conveyancing” services, make sure to be aware of the total price and what it includes.

Legally, no--but practically, yes, because conveyancing is such a technical and complicated process involving many different laws and many factors to consider. And if there are any issues or problems, a specialist conveyancing lawyer will be able to manage the situation using their experience and expertise.

Are you buying or selling a property and require the services of an experienced conveyancer? Please give our friendly team a call here at CS Conveyancing on 0415 090 269 and we will be happy to answer any of your questions.