The Conveyancing Process Explained: A Step-by-Step Guide for Homebuyers in Australia

For most Australians buying a home is one the biggest financial decisions they’ll have to make. Whether you're buying your dream home or investing in property, we understand how overwhelming the process can be. Therefore, it is important to understand the legal process that follows. Hiring a knowledgeable conveyancer is one of the most crucial phases in the home-buying process. In this guide, we'll take you through the conveyancing process step by step, to ensure you're well-prepared and understand what to expect at each stage of the process.

What Is Conveyancing?

The legal procedure by which a property is transferred from the seller to the buyer is known as conveyancing. A conveyancer usually oversees this procedure and they take care of all the legalities. Such as searching, examining contracts, and making sure the deal conforms with local regulations.

Although doing your own conveyancing is an option, it is usually advised to use a licensed conveyancer. This protects you from future problems by ensuring that the procedure is managed expertly and that all legal considerations are met.

Step 1: Offer Acceptance and Instruction to a Conveyancer

Once the seller accepts your offer for a property you will need to liaise with a conveyancer to manage the legal aspects of the transaction. At this stage, you should provide your conveyancer with some fundamental details such as:

• The agreed purchase price
• Any information about your financing or mortgage arrangements
• The details of the property being purchased

After receiving instructions, your conveyancer will start working on your behalf, communicating with real estate brokers, the seller's conveyancer, and other experts in the transaction.

Whether you're searching for a conveyancer in Reservoir, Essendon, Coburg, Brunswick, Eltham, or Preston, AMT Lawyers provides expert legal assistance to ensure a smooth property transaction.

Step 2: Contract Review and Due Diligence

Your conveyancer will start looking over the contract of sale once they have received instructions. The contract of sale outlines all terms and conditions of the transaction, including the price, deposit amount, settlement date, and any special conditions. Here's an overview of what takes place at this point:

2.1   Review of Contracts

Your conveyancer will closely review the contract of sale to guarantee that every provision is fair and unambiguous. They will verify that all the relevant information is included in the contract and that there are no unstated terms that might later cause you issues.

2.2   Property Title and Ownership

Your conveyancer will confirm that ownership is not disputed and that the seller is the official owner of the property. They will check the property title to make sure there are no loans or other legal problems that might later interfere with your ownership.

2.3  Conducting Searches

In Australia, conveyancers carry out a series of due diligence searches to ensure there are no hidden legal or financial risks associated with the property. Some common searches include:

• Land title search: Verifies the property's ownership as well as any encumbrances such as easements or mortgages.
• Council and zoning searches: Checks for any proposed developments, zoning laws or planning limitations that might have an impact on the property in the future.
• Water and drainage searches: Confirms that the property is connected to sewage and water services and makes sure the local drainage systems are operating properly.
• Environmental search: Assesses whether the property is vulnerable to environmental dangers such as contamination or flooding.

These searches help ensure that the property is free of any issues that might affect your ability to live in or sell the property in the future.

Step 3: Signing the Contract and Paying the Deposit

Once all due diligence is completed and all relevant searches have been made. If you’re happy with the terms of the contract, it’s time to sign. Signing the contract is a significant step in the conveyancing process. At this point, both parties agree on the terms and conditions and the contract becomes legally binding.

3.1   Paying the Deposit

At this stage, you’ll be required to pay a deposit, which is usually 10% of the purchase price, although this can change due to different factors. The deposit is held in trust by the seller’s agent or conveyancer and is deducted from the final sale price at settlement. The seller may be able to keep your deposit as compensation if you decide to back out of the agreement after signing.

3.2  Cooling-Off Period (if applicable)

In Victoria, buyers have a three business day cooling-off period after signing a contract to purchase a residential property. This period allows buyers to reconsider their purchase without facing significant financial penalties. 

How does it work?

• The cooling-off period begins the day after the buyer signs the contract. 
• To exercise the cooling-off right, the buyer must give written notice to the seller or their agent. 
• The buyer may be required to pay a penalty of $100 or 0.2% of the purchase price, whichever is greater. 
• The buyer is entitled to a full refund of any money paid, minus the penalty. 

When does it not apply? 

• The cooling-off period does not apply to properties purchased at a public auction.
• It also does not apply to commercial or industrial properties, or rural properties over 20 hectares.

Step 4: Preparing for Settlement Day

Once the contract is signed the next step involves preparing for settlement day. Which is when the property officially changes ownership. Before settlement occurs, your conveyancer will:

• Verify with your lender that your mortgage has been finalised (if applicable).
• Ensure that the balance of the purchase price is ready to be transferred.
• Calculate the stamp duty (a tax that must be paid to the state government based on the property’s value).
• Organise for the property transfer documents to be signed.
• Ensure that all relevant financial and legal documents are ready for submission.

A settlement statement that details all of the expenses related to the transaction, including any unpaid invoices, fees, and adjustments, will also be given to you by your conveyancer.

Step 5: Completion – The Transfer of Ownership

The day the property is formally yours is known as settlement day. This day brings about the following:

1. Your conveyancer will transfer the remaining balance of the purchase price to the seller’s conveyancer.
2. To formally register you as the property's new owner, a transfer of land must be filed with the Land Registry.
3. You can finally move into your new house after the seller's agent or conveyancer releases the keys.

Your conveyancer will now also submit the required documentation to the Land Titles Office of the state or territory where the property was bought in order to register the transfer of ownership.

Step 6: Finalising the Process

There are few last things that must be done after settlement:

1. Stamp Duty Payment: Your conveyancer will make sure that the appropriate state or territory authorities have received payment of stamp duty. It's crucial to plan ahead for stamp duty since it's owed at settlement and can be a substantial expense for purchasers.
2. Land Registration: To guarantee that you are formally recognised as the property's new owner, your conveyancer will file the title transfer paperwork with the appropriate land registration.
3. Final Documentation: You will be given a copy of your Certificate of Title and any other paperwork that proves your ownership of the property.

If you are looking for a conveyancer in Doncaster, Moonee Ponds, North Melbourne, Bundoora, Glenroy, Strathmore, or Taylors Lakes, our experienced team at AMT Lawyers is here to guide you through every step of the conveyancing process with expert legal support and personalised service.

Final Thoughts: Why Conveyancing Matters

The conveyancing process is a critical component of purchasing a home in Australia. While it may appear confusing, hiring a professional conveyancer can alleviate your stress and guarantee that the process goes well. From conducting legal searches to analysing contracts and arranging ownership transfers, a qualified conveyancer will protect your interests and assist you avoid any legal risks.

Understanding each phase of the conveyancing process will allow you to confidently navigate the journey and guarantee that your new property is legally sound.

If you're looking for a conveyancer in Melbourne, AMT Lawyers offers expert legal guidance to ensure your home-buying journey is seamless and stress-free. Happy home buying!