What is property conveyancing & how does it work?

4 min read | 7 Jan 2022

Not so fast. Before you can move in and proudly call the place your own, you’ll need to step through the conveyancing process. This comprises all the financial, administrative, and legal work required to transfer the house and land to your name.

Conveyancing can seem like a stressful hurdle on the path to owning a home, but it’s far easier to navigate if you know what to expect. Let’s take a closer look at the conveyancing process and what it involves.

Conveyancing is the process of transferring a legal title of land from an old owner to a new one. Like all things related to buying or selling a property, this is a multistep process that involves a small mountain of administrative paperwork.

While conveyancing is something you can do yourself, failing to fill out all the necessary legal documents can delay the settlement and, in some cases, even cause the deal to fall through. For this reason, many buyers hire a professional conveyancer to guide them through the process.

Strap in, because the conveyancing process is a long and windy one. All up you can expect it to take anywhere from 4 to 12 weeks from your initial offer, with the following steps along the way.

Any property on the market needs a professionally drawn contract of sale. The contract includes important details such as any mandated disclosures (such as structural problems) and certifications about the house.

If the property seems like a good fit, the buyer can make an offer. The seller might accept the offer out of hand, or commence negotiations to settle on an agreed price.

A formal deposit comes later down the line, but a keen purchaser might place an up-front deposit at this stage as a non-refundable ‘holding fee’. This doesn’t guarantee their right to the home, but it indicates their commitment to the offer.

The seller remains responsible for the property right up until the settlement, but buyers are generally advised to take out insurance from the  date of the deposit. Lenders often require evidence of an insurance policy as a condition of settlement.

Once the contract has been negotiated, a final copy is provided to both parties and the buyer puts down their official deposit (10% of the sale price in most cases). The remaining money (from adjustments and other fees) is paid upon settlement.

The cooling-off period gives the buyer a chance to complete their finance applications and carry out any final inspections of the property. The buyer also has the right to call off the deal during this period if they change their mind.

The cooling-off period does not apply to properties bought at auction.

An official transfer document is prepared by the buyer’s conveyancer or a solicitor and signed by both parties. The buyer also pays stamp duty for the transfer itself around this time, although you can negotiate to pay the fee on the date of settlement - depending on your lender’s terms and conditions.

Both parties then decide on a settlement time, which generally varies between 30 days and 6 weeks depending on the state. Off the plan purchases can take longer to settle as construction first needs to finish, and a new title needs to be drawn up.

Some contracts will specify “time is of the essence” if the settlement needs to be reached by a specific date. If either party fails to meet the deadline, the contract can be terminated and the deposit forfeited.

During the requisitions phase, the buyer’s conveyancer is entitled to probe the property further for any issues not disclosed during initial inspections (e.g. boundary disputes, contamination, defects, renovations). If any major issues are found, the buyer can rescind their contract, negotiate a discount, or sue for damages.

If buying a mortgaged property, the lender must give a payout figure and attend the settlement to formally discharge the mortgage.

The adjustment phase calculates any extra costs and monies owed to each party. For example, the buyer might be required to reimburse the seller for annual strata fees that have already been paid to cover the year. Council rates, utilities, and rental income might also need to be taken into account.

The purchase settles once the buyer has paid the full remaining balance of their deposit with all adjustments accounted for. A final check of the title is also carried out to make sure the mortgage has been discharged, third parties have been removed, and all clauses have been met.

The buyer pays stamp duty immediately following settlement, if they haven’t done so already. The property cannot officially be registered under their name until it has been paid.

Once stamp duty is paid and the final balance is settled, the buyer registers all conveyancing documents with the Land Titles Office, including:

• The transfer of title

• The seller’s mortgage discharge

• The buyer’s new mortgage

And finally, the property has a new owner!

A conveyancer is a professional who handles every aspect of the property transfer process. They’ll sort out the documentation, communicate with sellers and lenders on your behalf, and generally save you the headache that comes with handling a heap of legal paperwork on your own.

Conveyancers are also skilled in assessing properties throughout the sale process. This includes:

• Arranging building inspections

• Questioning sellers on any regulatory issues with the property

• Surveying the block to ensure the boundaries are clear

• Examining the contract of sale

Some conveyancers are solicitors qualified in property law. Others do not have legal accreditation.

While both conveyancers and solicitors make your life much easier during the property buying process, solicitors have the added ability to provide legal advice on fine print matters relating to tax and contracts. They’ll also cost you more.

It’s worth remembering, however, that not all solicitors are expert conveyancers. For many, conveyancing is just one of the numerous legal services they offer - and they aren’t especially experienced when it comes to real estate.

There is no requirement to hire a conveyancer when buying a home. If you wish, you can save a good chunk of money by handling all the paperwork on your own.

That said, most buyers don’t regret paying a fee to take the administrative burden off their shoulders. After all, buying a house is no mean feat - and it pays (sometimes literally) to have a conveyancer on your side to smooth out any issues and help you through what can often be a confusing process.

A big heads up! If you do your own conveyancing, you take on all the responsibility for the sale progressing in a legal manner. Make sure you fully understand the sale process and relevant legislation.