1. What is conveyancing?
Conveyancing is the legal process of transferring property from one owner to another.
2. What is the difference between a lawyer and a conveyancer?
A Lawyer is a person who is trained to advise clients on their legal rights and obligations in a variety of circumstances, including the buying and selling of real estate and the conveyancing process. Real Estate Lawyers typically have more extensive knowledge of the law and can guide you through your contractual rights, the conveyancing process and assist in any disputes that arise along the way.
A Conveyancer who is licensed, is a person that only deals in the process of conveyancing but are limited on what they can and cannot advise on.
3. What is PEXA?
PEXA stands for Property Exchange Australia and is an ‘Electronic Lodgement Network’.
PEXA is a secure online platform that allows for property settlements and transactions to be conducted electronically, rather than the traditional paper-based method. This includes, for example, transfers of land, mortgages, applications by surviving proprietor or legal personal representative, caveats and more.
4. What is “Cooling off” and how long is it?
A cooling-off period is a period where after the purchaser has committed to buying a home, they can change their mind and end the contract.
The cooling-off period is 3 business days from the day on which the contract was signed by the purchaser (not the seller).
It is important to note that there are some circumstances where the cooling-off period does not apply for example, where the property was purchased at a public auction or within three clear business days before or after the public auction.
If you do cool-off, there are also financial consequences i.e. the seller will have the right to retain $100 or 0.2% of the purchase price, whichever is greater.
5. What are special conditions in a contract?
Many contracts have special conditions added to accommodate for the different needs and circumstances of the parties. Special conditions may be negotiated and agreed between the parties and can override the standard terms. It is best not to sign a Contract until you understand the effect of any special conditions that are included in the Contract.
6. Do I need a Finance Clause in the Contract?
Where you do not have the funds available to purchase a property and you will be looking to a lender to provide such finance, unless you already have an approval in place (not a pre-approval or conditional approval), it may be wise to have a contract that is ‘subject to finance’ depending on your personal circumstances.
A subject to finance clause tells the vendor that you agree to purchase the property subject to the condition that your finance is approved. Where your finance is not approved, and provided the condition is drafted appropriately in the contract, you will usually be able to end the contract and receive a refund of any deposit made.
Essentially, having such a clause protects a purchaser from forfeiting their deposit if they are not able to complete settlement because they do not have sufficient finance and also ensures that they are not sued by the vendor for breaching the contract.
Including such a condition in the contract will protect you and allow you to withdraw from the purchase in the circumstance that your loan application is denied.
7. What is a Section 32?
A ‘Section 32’ is also known as a ‘Vendor’s Statement’.
It is a document that is required to be prepared by the seller which requires the seller to disclose certain information (required under the Sale of Land Act 1962) about the property. A Section 32 is provided to prospective purchasers prior to signing a contract and is required prior to an offer being made by a buyer.
8. What fees will I have to pay at settlement?
Buying a home
- Outgoings including rates and taxes for the period that you own the property - Council rates, water rates, owners corporation fees (if applicable) and land tax (if applicable)
- Stamp duty
- Lodging fees for the Transfer of Land
- Lodging fees if you will be taking out a mortgage
- Bank fees, if you will be taking out a loan
- Disbursements – this may include property certificate fees and other expenses
- Legal fees
- Insurance (home / landlord / title)
Selling a home
- Outgoings including rates and taxes for the period that you own the property - Council rates, water rates, owners corporation fees (if applicable) and land tax (if applicable)
- Lodging fees if a mortgage needs to be discharged at settlement
- Loan payout - bank interest and charges where you have a mortgage over the property
- Disbursements – this may include property certificate fees and other expenses
- Legal fees
- Sales commission and marketing costs if you appointed a real estate agent for your sale
- There may also be a requirement to pay GST on new residential property
9. What are Adjustments?
‘Adjustments’ or ‘Statement of Adjustments’ is a document that is ordinarily prepared by the purchaser’s representative prior to settlement and calculates the outgoings to be adjusted at settlement, together with any other adjustments under the Contract of Sale which may include, for example, an apportionment of rent, any penalties payable etc.
A Statement of Adjustments will also include a ‘Settlement Statement’ which will detail the purchase price, any monies already paid such as the deposit, the balance owing at settlement and then plus or minus the adjustments.
10. Pre-Settlement Inspection
The Contract requires the property be handed over in the same condition as it was on the Day of Sale (except fair wear and tear) and approximately one week prior to settlement the Purchaser will be entitled to attend the property for a pre-settlement inspection for this purpose.
11. Key Collection
Vendors, you will need to liaise with the selling agent to provide all keys and remotes of the property prior to settlement.
Purchasers will only be able to collect keys after settlement has been completed and when the agent has received settlement confirmation from the Vendor’s legal representative.
If you are a buyer or seller who requires advice or assistance in the conveyancing process, contact our Real Estate Lawyers on +61 3 9822 8588 or via email HERE.
