The legal work involved in preparing a sales contract, mortgage or other property related documents, is called conveyancing. While you can do your own conveyancing, most people engage a licensed conveyancer or solicitor to simplify the process.
What is the meaning of conveyancing?
“the branch of law concerned with the preparation of documents for the conveyance of property”
Here are some details a seller and purchaser need to consider when carrying out a conveyancing transaction:
SALE OF PROPERTY – Critical details that a vendor must consider when selling their property:
- Is it the right time to sell? Sometimes it’s critical for vendors to do their research as to what the current property market is doing if vendors want to get the best sale price. Vendors should review sale prices from past weekends in their area to try and work out what they will sell their property for and whether it’s a good time to sell.
- Vendors should also do their research as to what the best method of selling their property is and who would be the best agent to sell their property.
- The key is to find the right agent. Vendors should interview at least three agents and request the agents provide them with sales reports on similar properties. Vendors should ask for a price guide for their property and get them to justify it in detail. Vendors should not just sign up with an agent who is the cheapest.
- Vendors must ensure that if they decide to put their property on the market, the property must be in immaculate condition. If the property is not looking good, then it will take longer to sell as purchasers are likely to view properties that will be in very good condition.
- Selling a property can be an expensive process and some vendors can be so focused on trying to achieve a particular sale price that they do not take into consideration the costs associated with selling their property.
- Vendors should be aware that in order to sell their property, they will need to have the original Certificate of Title to their property as the new purchaser’s lender (if any) will require this on settlement. Without this certificate, they will not be able to sell their property so if a vendor cannot locate their Certificate of Title, they will need to instruct their solicitor or conveyancer to apply for a replacement one which can sometimes take between 2-3 weeks.
PURCHASE OF PROPERTY – Critical details that a purchaser must consider when looking to purchase a property:
- A purchaser must have the funds available before they start the process of searching for a property. This should involve working out how much they can borrow (if needed) and also how much of their own funds they will need to contribute. Ideally, purchasers should save the largest possible deposit before deciding to buy a property to minimize the amount they will need to borrow. This will also reduce the amount of interest that will eventually need to be paid and means extra charges such as mortgage insurance can be avoided. It is ideal for a purchaser to engage the services of a professional mortgage broker to assist them with working out the essential figures to achieve the best result. A purchaser should not attend an auction unless they have received unconditional loan approval.
- A purchaser should also obtain legal advice on the Contract for Sale once they have found a property they wish to purchase. This is where the purchaser will discuss the contents of the Contract for Sale with a solicitor or conveyancer. All the documents within the Contract for Sale should be discussed and explained to a purchaser so that they know what they are signing when purchasing the property and know what exactly they are buying.
- A prudent purchaser should also obtain inspection reports of the property before proceeding with the purchase. Pre-purchase property inspection reports are a written account of the condition of the property and should only be carried out by a qualified builder or pest/termite inspector.
Here are some key terms associated with a conveyancing transaction:
Certificate of Title – a certificate issued pursuant to the NSW Land Registry Services, which certifies that the person named therein as the registered proprietor has title to the land described in the certificate.
Contract date – this is the date on which both parties have signed the Contract.
Contract for the sale and purchase of land - a Contract for the sale and purchase of land is a legal contract for the purchase of land and improvements by a buyer from a seller for an agreed upon value in monetary terms.
Discharge of Mortgage – this is the document which is prepared by a mortgagee on title and is signed by the mortgagee once they receive payment for the debt owing by the vendor.
Improvements – characterised as being permanent on the property, e.g. a house or garage.
Mortgagee – the lender in a mortgage, typically a bank, building society or savings and loan association.
Mortgagor – the borrower in a mortgage, typically a homeowner.
Property – the land, the improvements, all fixtures and the inclusions, but not the exclusions.
Price – total amount which the property has been sold for.
Settlement date – this is the date where all representatives of the parties, including any financiers, have to enter final settlement amounts into Pexa and sign off for the settlement to proceed. This is the day when vendors need to release the property to their purchaser.
Special Conditions of the Contract for Sale – these are included in the Contract for Sale and prepared by the vendor’s solicitor. They are in addition to the printed conditions provided by the Law Society of New South Wales. Each condition gives rise to a contractual obligation, breach of which can give rise to litigation.
Termination of the Contract for Sale – a Contract for Sale can be terminated when an actual breach occurs if an obligation under an essential term of the Contract for Sale is not met. An essential term is usually specified in the Contract for Sale. If breached, the non-breaching party will be able to claim damages, as well as to terminate the Contract for Sale. The decision of Bieri v Ottoman Enterprises Pty Ltd as trustee for Yucel Family Trust  NSWSC 563 from the New South Wales Supreme Court (Equity Division) outlined the relevant principles relating to the valid termination of a contract for the sale of land by a vendor, and the right to claim.
If you have further questions about conveyancing and how we can help you with the purchase or sale of property, please contact us at firstname.lastname@example.org.
This is not legal advice.
Photo by Micheile Henderson on Unsplash