Overview
Understanding the Process of Purchasing Property
The conveyancing process for buyers begins as soon as all parties have signed the contract of sale. From this point, there are several important legal, financial, and practical steps to complete to ensure the smooth transfer of ownership. This guide outlines the key stages of conveyancing for buyers in Queensland, from contract signing to settlement.
Initial Steps After Signing the Contract
Solicitor Review and Risk of Damage
It is highly recommended that you have a solicitor review the contract before you sign. Once signed, the risk of damage to the property transfers to you, the buyer, so it is essential to immediately arrange insurance to protect your investment. This will ensure that any unforeseen damage or issues are covered from the moment the contract is executed.Initial Documents Pack
After signing the contract, your solicitor will send you an initial documents pack that includes:- Key contact details for your conveyancing process
- Important dates, such as finance approval deadlines, building and pest inspections, and settlement
- Documents to complete, sign, and return to your solicitor
Be sure to return all completed documents promptly to avoid delays.
Cooling-Off Period
In Queensland, standard property contracts come with a 5-business-day cooling-off period. During this time, you have the right to terminate the contract for any reason, but you will need to pay a termination penalty of 0.25% of the purchase price.
Searches and Investigations
Your solicitor will provide you with a search checklist, outlining all the searches that can be conducted on the property, along with what each search will reveal and the associated costs. Some common searches include:
- Title search: Ensures that the seller legally owns the property and that there are no restrictions on the sale.
- Council rates search: Confirms that there are no outstanding rates or land tax owed on the property.
- Water search: Checks if there are any unpaid water rates.
Certain searches are considered standard and should not be skipped. Your solicitor may also recommend additional searches depending on the property’s location or your specific concerns. For example, if the property is in a flood-prone area, a flood search may be advisable.
Building and Pest Inspections
If your contract is subject to a satisfactory building and pest report, it is your responsibility to arrange for a licensed inspector to attend the property. Once the inspection is complete:
- Provide the report to your solicitor.
- Advise your solicitor whether you are satisfied with the report or if there are issues that need addressing.
If significant defects or pest issues are found, your solicitor can negotiate with the seller on your behalf to either:
- Reduce the purchase price
- Request that the seller fix the issues before settlement
- Terminate the contract if the issues are substantial
Finance Approval
It is critical to provide a copy of the signed contract to your financier or broker immediately and advise them of the finance approval deadline. The financier will process your loan application and provide you with loan documents once finance is approved.
Finance Approval Deadline
If you anticipate delays in receiving finance approval by the due date, contact your solicitor as soon as possible. They may be able to request an extension from the seller, though it is at the seller’s discretion whether to grant it. It is important to stay in regular communication with your financier to ensure approval is received in time.Loan Documents
Once your finance is approved, your bank will send you loan documents. Be sure to complete and return these promptly. Any delays in submitting loan documents could delay settlement, potentially causing you to breach the contract.
Preparation for Settlement
Transfer Documents
Your solicitor will prepare the Transfer documents using the information you provided and arrange for the seller to sign them. In many cases, your solicitor can sign the Transfer documents on your behalf.Stamp Duty Payment
Before settlement, your solicitor will calculate stamp duty (a tax paid to the state government) based on the purchase price of the property. The stamp duty must be paid before settlement, and your solicitor will arrange for the documents to be assessed for this payment.Settlement Adjustments
Settlement adjustments will also be calculated by your solicitor, ensuring that expenses like council rates and water charges are appropriately divided between you and the seller. You will only pay for these services from the date of settlement onwards.
Settlement Process
Once everything is in order, your bank will confirm with your solicitor that settlement is ready to be booked.
Settlement Coordination
Your solicitor will work with the seller’s solicitor and your bank to coordinate the settlement, ensuring all funds are transferred and the necessary paperwork is lodged.Shortfall Payments
If your bank does not provide enough funds to cover the full settlement amount, you must transfer the shortfall to your solicitor’s trust account before settlement. This ensures that there are no delays in finalizing the sale.Settlement Day
On settlement day, your solicitor will attend the settlement on your behalf or arrange for a settlement agent to do so. The following will take place:- Transfer of funds from your bank to the seller.
- Calculation of final settlement adjustments (e.g., rates and water).
- Lodging of the Transfer documents with the Titles Office via your bank.
Post-Settlement Actions
Once settlement is complete, your solicitor will:
- Notify you and the real estate agent that the settlement has been effected.
- Instruct the agent to release the keys to you.
If there were any outstanding payments to local authorities, such as rates or water, your solicitor will ensure these are paid from the settlement funds.
Finally, your solicitor will transfer the title to your bank for registration at the Titles Office. You should contact your bank approximately one month after settlement to confirm the title has been registered in your name.
FAQs: Conveyancing for Buyers
1. What happens if I miss the finance approval deadline?
If your finance is not approved by the due date, you must immediately inform your solicitor. They may be able to request an extension from the seller, but it’s ultimately at the seller’s discretion.
2. Can I terminate the contract during the cooling-off period?
Yes, you can terminate the contract during the 5-business-day cooling-off period for any reason, though you will be required to pay a 0.25% penalty of the purchase price.
3. What are settlement adjustments?
Settlement adjustments are calculations made to fairly divide the costs of rates, water, and other expenses between the buyer and the seller. You only pay for these expenses from the date of settlement onwards.
4. Do I need to attend the settlement?
No, your solicitor will handle settlement on your behalf. If needed, they will arrange for a settlement agent to attend.
5. What should I do if my loan funds are insufficient for settlement?
If your loan does not cover the full settlement amount, you must transfer the shortfall to your solicitor’s trust account before settlement day to avoid delays.
The conveyancing process for buyers can be complex, but by following these steps and staying in close communication with your solicitor, you can ensure a smooth transaction. Always ensure your solicitor is informed of any potential issues to avoid delays or complications.
Disclaimer: This information is intended for general guidance regarding Queensland Property Law. It does not constitute legal advice. We strongly recommend seeking legal advice tailored to your specific situation. For expert assistance, call 1300 590 613 or use our live chat to arrange an initial consultation.
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