Your 1 Minute Lesson In Conveyancing

Legal work is THE most important part when buying property. Jeremy Cabral from homeloanfinder.com.au shares his tips.

Legal work is THE most important part when buying property. Jeremy Cabral from homeloanfinder.com shares his tips.

What is conveyancing?

Conveyancing is the handling of legal paperwork and legal checks when you buy or sell a property. This involves making sure you understand the contract, that it is suited to your needs, conducting title checks and legal registrations with the state government.

How much will it cost me?

‘The range can be anywhere from $600 through to $6,000 I have seen. You get what you pay for. Your legal work is the most important part when buying property. My advice to you is don’t skimp on your legals.’ says Geri Forsythe, Founder of Sydney Property Conveyancing.

When you appoint someone to handle the change in title, there are two components that they will charge for:
• Conveyancing fees: This is paying the lawyer for their time to prepare all the documents, do all the checks and actually make the physical settlement on your behalf.
• Disbursement fees: Are the out of pocket expenses the conveyancer or solicitor incurs during the settlement process.

When will the purchase price and keys be exchanged?

This is called ‘settlement’ or ‘completion’ on your contract of sale to occur on a set date or in between a range of time, such as a week. Settlement typically occurs around six weeks after signing the contract. Although this can vary from state to state, and can also be varied in each contract. It is the physical act of exchange of cheques and paperwork between the legal representatives of both the seller and the buyer.

What is a cooling off period?

A cooling off period is the number of days that a buyer can legally break a contract to purchase a residential property.

Using the cooling off period to break a contract involves the buyer paying a termination penalty, depending on the state, of around 0.25%. On the plus side, the buyer doesn’t lose their deposit. On a property worth $350,000 the termination cost is roughly $8750.


Termination of contract costs during cooling off period

ACT
Cooling off period: 5 business days
Purchase price lost: 0.25%

NSW
Cooling off period: 5 business days
Purchase price lost: 0.25%

NT


Cooling off period: 4 business days if purchaser isn’t represented by a conveyancer or solicitor
Purchase price lost: Nil

QLD
Cooling off period: 5 business days
Purchase price lost: 0.25%

SA
Cooling off period: 2 business days
Purchase price lost: The small holding deposit is forfeited

TAS
Cooling off period: None

VIC
Cooling off period: 3 business days.Is waived if 3 days before or after the auction, or if legal advice has already been sought. Farms can be exempt.
Purchase price lost: 0.2%

WA
Cooling off period: None

When is there no cooling-off period?

As auctions don’t have cooling-off periods. Buyers around the nation at auctions should do all their homework beforehand; including building and pest inspections, obtaining conditional finance approval and getting a conveyancer to examine the contract and conduct their checks.

Tasmania and Western Australia don’t have mandatory cooling-off periods. The old adage of ‘buyer beware’ strongly applies in these states.

Mandatory cooling-off periods can be waived by buyers if they choose to do so. Commonly this is done by buyers (often experienced property investors) who want to give the seller a strong and guaranteed offer.

How long does a conveyancer need to do their job?

Take for example NSW. If contracts are exchanged with a cooling off period, a conveyancer has five business days to conduct due diligence. This includes reviewing the contract, arranging amendments if necessary, organise inspection reports, work with your lender to get a valuation in time and provide you with written advice on all these matters. ‘That can all easily be done within the five business days,’ says Forsaith.

Getting a good conveyancing professional onboard during the highly stressful home-buying process could save you thousands in due diligence mistakes and any number of grey hairs.

This is general information only and is not a substitute for conveyancing advice. for more information on conveyancing visit
www.homeloanfinder.com.au/conveyancing-and-legal

Written by Jeremy Cabral, Publisher of top home loan comparison website, www.homeloanfinder.com.au, a free website which aims to help consumers make informed choices when selecting a home loan.

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