It can be complicated to buy or sell a home. There is often a lot of legal and industry-specific jargon involved. It is important to understand how conveyancing works before you begin.
The conveyancing process is split into two main stages – exchange of contracts and completion. Your conveyancer melbourne will work with both parties to make sure all the paperwork is completed and legal ownership passes.
Completion
Conveyancing is the process of transferring the legal title of a property from one person to another. This involves a number of steps that both the buyer and seller must take.
First, both the buyers and sellers must agree on a closing date. Once both parties have reached an agreement, the conveyancers will exchange the contracts and conduct any other searches.
This includes any planning issues, checking for flooding on the land, and other environmental searches related to the property. Once all of the paperwork is completed and any necessary payments have been made, the property can be registered in the buyers name at the Land Registry.
Exchange of Contracts
The exchange of contracts is the final step in the property sales process. Once completed, it becomes legally binding for both the buyer and seller of a house, meaning neither party can back out without facing serious financial penalties.
Each party signs identical contracts. The buyer usually pays a 10% deposit. Once the contracts have been exchanged, the buyer can then arrange to pay the rest of the money for the property (usually a mortgage deposit), and ownership transfers to them.
It is common to agree on a date for completion once the contracts have been exchanged. This is when the buyer will receive keys to their new home and the ownership of the property will pass to them.
Land Registry Searches
During a conveyancing transaction, your solicitor will need to conduct property searches at HM Land Registry. These searches will show that the seller is the legal owner and have the right to sell the property to you.
The searches will check the ‘Title Register’ and ‘Title Plan’ to identify the ownership of the property. They are required by law to allow the sale of the property to proceed and cost approximately PS3 each.
A search will also identify any rights of way or restrictive covenants over the property that may affect its use. These can make the property unsuitable for certain uses, or could impact on the price.
Mortgages
A mortgage is a type loan where the borrower pays a portion of the property’s cost and then repays it. The mortgage lasts longer than most other types of loans with 30-year mortgages being the most popular.
A lender extends a mortgage loan to a borrower who is buying or refinancing a property. Mortgages may be drawn to support the purchase or refinancing of residential properties or commercial properties such as retail malls, warehouses and office buildings.
A mortgage loan is secured by an asset or real estate; this asset can be the home itself, a car or an investment portfolio. In the event of a borrower failing to make payments on the mortgage, the lender can foreclose on the property and sell it to recover outstanding debts.
Legal Fees
Conveyancers are essential to any property transaction. They ensure that ownership is transferred from the seller and registered the new owner with the Land Registry.
This work will be charged by your conveyancer. It should be clearly noted as an additional fee to their basic fee, or as a standalone supplement. They’ll also have additional work liaising with your lender and processing the redemption of any mortgage you have.
Sometimes, less careful companies conceal additional ‘disbursements” in the small print. They may also call them ‘potential extra costs’. However, these overheads are covered by the firm’s legal fees. Ask the firm to verify that these costs are included in the quote.
