Whether you’re a first home buyer or you’re in the process of selling a house, you’ve probably heard a lot of conveyancing terms floating around. To help you better understand what they all mean, we’ve outlined some of the common conveyancing terms below with explanations.
Conveyancing terms you need to know
Acceptance of title
When the purchaser has accepted the title of deemed to have done so. If the purchaser does not object to the validity of the title within a reasonable period of time, then they are considered to have accepted the title.
When the sale of a property is conducted in public and is sold to the highest bidder.
Learn more: Private sale vs auction
A caveat on the property is a legal claim lodged by a person with an interest in the property. The property cannot be sold until the caveat is lifted.
Completion date/settlement date
This is the date that ownership of the property passes from the seller to the buyer; it’s also known as the property settlement date. The usual completion date will be either 28, 35 or 42 days from the date of exchange of contracts.
You are not required to be present on the completion date as we will arrange settlement with your financier and the other party, but you will need to be available to collect the keys for your brand new home.
For more information: property settlement process NSW
Contract of sale
This is the agreement between the buyer and the seller. It sets out the main terms of what has been agreed such as the property, the price and the names of the parties. It also deals with the process if something goes wrong. Contracts of sale can be exchanged in person or signed digitally.
For more information: special conditions of sale
Cooling off period
Once the buyer has signed the contract and has been served the Form 1, the cooling off period begins. You typically have 5 business days, which gives you a chance to conduct a building and pest inspection and be sure you want to go through with the purchase. This period also gives you time to back out of the contract.
Cooling off rights are not available when you’re buying a house at auction.
Learn more: Cooling off rights
On exchange of contracts the buyer usually pays a 10% deposit of the purchase price to the agent. On some occasions, a reduced deposit is accepted. However, if you pay a reduced deposit and then fail to complete the purchase (through no fault of the seller), you will be required to make the deposit up to the full 10%. You may also have to pay compensation to the seller if the seller loses out through your failure to complete.
Learn more: is a house deposit refundable?
These are charges paid by your solicitor or conveyancer that are then passed on to you. Many quoted fees do not include disbursements and are therefore additional to the fee. These can include applications. Our fee includes disbursements, and therefore our quoted fee is what you pay.
A right to use and access part of the land on the property. It is typically used when access is needed for wires and pipes for maintenance to sewage, drainage and electricity. An easement can also refer to shared driveways and paths.
A formal burden or charge over a property listed on the Title; such as a mortgage, easement, or lease.
Exchange of contracts
Exchange of contracts occurs when either the agent or the seller’s property lawyer or conveyancer has a contract signed by each party. The agent, solicitor or conveyancer then dates the contract and passes control of the contract signed by each party to the other party. From the minute contracts are exchanged, the sale becomes binding (subject to the cooling off period and finance).
This conveyancing term means the land owned by the registered proprietor (owner) and not leased from the Government and that has a Certificate of Title. Land which is freehold is shown on the Certificate of Title. Not all land in New South Wales is Freehold. Other types of land holdings are Leasehold and Old System Title.
Inclusions and exclusions
This is a list of the items at the property which are either included or excluded from the sale. These items are included in the contract so that both parties understand what is included in the selling price.
Land and Property Information
Also known as LPI. A Government department that retains records of who owns the land.
Temporary use of the property. When the lease expires the use of the property reverts back to the registered proprietor.
A person/entity that is lending you money, such as a bank.
A mortgage is a legal agreement between the purchaser and a lender (such as a bank) to buy or refinance a property without having the cash upfront. It is offered at a fixed or variable rate and can be paid over 30+ years.
Off the plan
Buying off the plan involves buying a property that you have only seen the plans for. The property in question has not been built yet.
A loan pre-approval means a lender has agreed, in principle, to lend you an amount of money towards the purchase of a property.
These are requests to local councils and government departments to see whether there is any money owing or any easements, encumbrances or caveats on the property. There are many other searches your conveyancer can do, but you need to be aware that each government department charges for each search and it can get expensive to search each department. especially since these fees will be passed onto you.
What does section 27 mean? Also known as the early release of deposit authority, it is a written request by the vendor to get the deposit that has already been paid by the purchaser before settlement.
This is a tax charged by the government. Everyone who buys or sells land, unless you are entitled to an exemption, must pay stamp duty.
Subject to finance
A clause in a contract that states the purchaser of the property has to obtain approved finance before a set date. Failure to do so releases them from the contract without a financial penalty.
This is a report carried out by a surveyor that identifies the land and any buildings on the land and states whether they are built wholly within the land.
If you are buying a property you should be aware that the property is “sold as seen”. It is your responsibility, as the buyer, to discover any physical defects by means of inspections and surveys.
Title Deeds or Certificates of Title
These documents firstly act as evidence that the person selling the property actually owns it, and secondly set out any rights or obligations that affect the property.
If you are selling, then valuable time can be saved if the whereabouts of your title deeds can be ascertained at an early stage. If you have a mortgage, then your bank or building society will be holding your title deeds. Your conveyancer will need to know your mortgage account number and the name and address of the lender.
This is the document that passes the ownership of the property from the seller to the buyer.
It is dated with the completion date, and will be sent to LPI after completion. LPI needs this deed to change their records, and show the buyer as the new owner of the property.
This is the person selling the property.
Talk to Owen Hodge
Still unsure about some conveyancing terms or the conveyancing process? Our expert conveyancers are here to help! Get in touch with our team today to schedule an initial consultation on 1800 770 780.
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