Buying your first home is a huge deal. No doubt you have never taken on such a large debt before in your life, and you may be feeling unsure about all the legal jargon and the steps involved in the purchase, too.
For example, you may be wondering:
What is conveyancing?
Conveyancing is the term given to the legal process of transferring the title of a property from the vendor to the purchaser. This legal process involves giving pre-purchase advice on the contract, the work done between exchange of contracts and settlement and the time and directly following settlement, too. This process happens whether you are buying your first home or selling your house.
Why is pre-purchase legal advice so important?
Once you have paid the deposit and both you and the vendor have given each other signed contracts of sale of the property, you are said to have exchanged contracts. When this occurs, both you and the vendor are bound by all of the terms in the contract. This means that it is vital that you have a solicitor review the contract to identify any clauses that may be against your interests and to advise you to include certain clauses to protect yourself. In addition, the solicitor will be able to identify if there are any issues with the land itself that you may not have been aware of, such as restricted use of the land, being in a mine subsidence area or any uncertified renovations or swimming pools.
What is the “cooling off” period?
The standard contract for the purchase of land provides for the purchaser to be able to terminate the contract within 5 days of exchange without incurring a penalty (you might be required to forfeit the holding deposit if paid). If you are purchasing at an auction, however, there is no cooling off period. The parties might agree to waive the cooling off period or extend the period.
What will my solicitor need to do between exchange and settlement?
During the time between exchange and settlement, your solicitor will need to conduct all their due diligence inquires – checking that all of the documentation is in order. They will also liaise with your lenders and prepare the settlement figures, making sure that all of the necessary information has been placed into the online portal ready for settlement.
Will they need to contact me a lot?
Many First Home Buyers start to get nervous between exchange and settlement because they haven’t heard from their solicitor. However, in conveyancing, no news is generally good news, and your solicitor is quietly working away in the background getting everything ready.
As the settlement date approaches, your solicitor will prepare a settlement sheet. This lists all the monies that are to be paid to various parties at settlement including things such as working out adjustments that need to be made to the settlement monies for council and water rates so that you take over the property with no debts attached to it.
Around this time, monies for stamp duty will be required to be paid in preparation for settlement.
Almost all settlements these days take place online, and you are not required to attend at all. Your solicitor will call you to let you know when it has settled, and the vendor’s solicitor will let the real estate agent know that they can release the keys to you.
Still got questions?
Don’t’ hesitate to get in touch with our property law expert, Monique Smiles on 4929 3995 who is always happy to answer your questions and can help guide you through the process of buying your first home.