What is conveyancing? Costs and process explained

Buying or selling property can be a stressful process, but a conveyancer is one person we strongly recommend retaining to help you along the way.

You’ll need a conveyancer or solicitor whether you’re the buyer or the seller, and it’s a cost you should factor in before entering the property market.

So, what is conveyancing, and what exactly does the process involve? Our guide will help explain.

Conveyancing is the legal process of transferring ownership of real estate, whether property or land, from one party to another.

This complex process involves examining various legal documents, completing property searches and arranging settlement.

The main participants in a conveyancing process include:

• Seller (or vendor) – the individual or entity selling the property
• Buyer – the individual or entity purchasing the property
• Financial institution – the lender providing finance in exchange for a mortgage over the property
• Licensed conveyancer or solicitor – professionals responsible for managing the transaction, with one representing the buyer and another representing the seller.

It is possible to do your own conveyancing, but it’s not recommended unless you have an in-depth understanding of Australian property law.

You’ll also be held liable if there are any issues during the sale.

A conveyancer is a licensed professional who provides information, legal guidance and manages the process of buying or selling property.

Conveyancers act in your best interest and can assist you by reviewing and exchanging the contract of sale, organising building and pest inspections, and transferring the deposit.

You should make sure that a conveyancer is licensed with the relevant state or territory authority before retaining them. Solicitors are also able to carry out conveyancing.

A conveyancer is a licensed professional whose expertise is in property law and transferring ownership of real estate.

A solicitor (or lawyer) can perform the same duties as a conveyancer while also bringing a wider understanding of the law. With their broader knowledge, a solicitor will also likely cost you more.

You may need to hire a solicitor when buying or selling your property presents complex issues.

Conveyancing fees vary depending on your location, the person’s level of expertise and the amount of work involved, but generally speaking, it can cost anywhere between $500 to $2,500.

In addition to your conveyancer’s legal fees, you will also have to pay for disbursements which could include the title search, mortgage registration and transfer registration.

You’ll also have to account for other potential costs, such as building and pest inspections, property valuation fees and stamp duty.

Keep in mind that costs will likely increase if you retain a solicitor instead of a regular conveyancer.

When choosing a conveyancer or solicitor, be sure to compare:

• Fees and/or commissions
• Qualifications and experience
• Reviews (from family, friends and online)
• Value of offerings (such as included services).

While not exhaustive, here is a general outline of steps in the conveyancing process.

It begins when a buyer agrees to purchase property or land from the seller by making an offer which is accepted.

Prepare contract of sale

The contract of sale is a legal document which includes details such as:

• Name and address of the buyer and seller
  
• Address of the property where ownership is being transferred
• Purchase price
• Deposit amount and date for payment
• Settlement date and any attached conditions of sale
• Description of the property, fixtures and fittings
• Cooling off period
• Other terms and conditions.

A contract of sale outlines the rights and responsibilities of both the buyer and the seller – if both parties agree on the terms, the buyer will pay the purchase price and the seller will transfer over the title to the property.

You shouldn’t exchange or sign a contract of sale until you’ve reviewed it with your conveyancer or solicitor. Once signed and exchanged, the contract becomes legally binding.

Arrange inspections

Before exchanging the contracts of sale, the buyer or their representative should arrange for a building and pest inspection of the property. If the property is part of a strata, the buyer should also request a strata inspection report.

Exchange contract of sale and pay deposit

Once the contract of sale has been signed and exchanged, the buyer is required to pay a deposit, which is usually about 10% of the purchase price (though this can vary).

The deposit amount is typically advised by the seller or real estate agent, and it’s paid by the buyer as a sign of good faith in their interest in the property.

The buyer’s conveyancer or solicitor handles the transfer of the deposit into a trust account, with the final balance to be paid at settlement.

Buyers should have compared home loans and organised finance prior to exchange of contracts.

Insure the property

The buyer should compare home insurance and insure the property after contracts have been exchanged.

However, the purchaser is not responsible for any damage to the property until settlement has occurred and the title has been transferred.

Lending institutions may require proof of building insurance, with the lender noted as an interested party, as a prerequisite to settlement of the loan.

Cooling off period

A contract of sale should come with a cooling off period, which gives the buyer some peace of mind and protection, and allows them to withdraw from the contract in certain circumstances.

Cooling off periods will vary by state and territory, and they don’t apply to purchases at auction.

Transfer property title and pay stamp duty

To transfer a property’s title, the buyer’s conveyancer or solicitor will prepare a transfer document, get it signed by the buyer and arrange to pay stamp duty.

The cost of stamp duty varies across states and territories, but you can get an estimate using our free stamp duty calculator.

The deadline for payment also differs depending on where you live, but you can learn about the timeframes in each state and territory in our in-depth guide to what stamp duty is.

Once signed by the buyer, their conveyancer sends the transfer document to the seller’s conveyancer or solicitor to get them to sign and stamp.

Transfer document stamped

After the seller receives the transfer document, they must sign and stamp it before settlement so that the buyer can register the transfer immediately after settlement has taken place.

Having the transfer document signed and stamped is also often a requirement of the buyer’s lending institution, so the home loan can be registered right away.

Formal questions conducted

The time between the purchase of the property and the settlement date typically lasts around 30 to 90 days, though there’ll be some variation depending on your state or territory.

During this period, the buyer and their representative can ask the seller formal questions about the property – these are referred to as requisitions on title.

Just note that if you live in Victoria, requisitions on title have been replaced by warranties in the contract.

Search for defects

In addition to the requisitions on title, the buyer’s conveyancer will dig deeper and search for defects in the title, potential land contamination and illegal construction on the property.

If such features are found which have not been disclosed in the contract of sale, the buyer might have means for recourse against the seller, or be able to withdraw from the sale entirely.

Calculate final payment

Prior to settlement date, the seller’s lender must be contacted to calculate the payout figure at settlement, arrange attendance at settlement to provide a discharge of mortgage and to hand over the title to the property.

Calculate adjustments for council and water rates

The buyer’s representative will calculate and adjust for any payments that the seller has made – typically for council or water rates – that run over into the time when the buyer will officially own the property.

These adjustments are then factored into the final calculation for money to be paid across by the buyer at settlement.

Settlement

On settlement day, the purchaser provides the agreed money to the seller. For most of us, it’s likely in the form of a home loan.

The buyer’s conveyancer or solicitor will complete a final search before settlement to ensure that the title is free from any restrictions that may have occurred between the date of exchange of contracts and settlement.

Settlement can be physically attended by both the vendor and purchaser’s solicitor/conveyancer and the financial institutions, but it’s also common for settlement to occur online.

This is where the title documents are handed over in exchange for the final payment of the agreed purchase amount.