Frequently asked Conveyancing questions
1. What is conveyancing and do I actually need a conveyancer or a solicitor?
Conveyancing is the legal process of transferring property ownership. It includes reviewing and advising on the contract and managing the whole process until settlement. In the ACT and NSW, you can use either a solicitor or conveyancer, however a solicitor can provide broader legal advice.
2. What is the cooling-off period and how long do I have?
The cooling-off period refers to the short window after signing a contract of sale where a buyer can withdraw from the purchase.
In NSW and ACT, the period begins upon the exchange of contracts, ending on the 5th business day from the date of exchange.
- In NSW, withdrawing from the contract during the cooling-off period will generally result in a 0.25% penalty of the purchase price, deducted from the deposit.
- In the ACT, common practice is to wait until you have unconditional finance approval and completed all required enquiries and checks to exchange contracts. A certificate (s17 certificate) is provided by your solicitor to waive the cooling off period.
If a property is sold at an auction, the cooling-off period will not apply.
3. What searches are done on the property and why do they matter?
- In NSW, the buyer is responsible to undertake the searches, inspections and other investigations as part of their due diligence when purchasing a property. Generally, before property settlement, various searches take place to give buyers a comprehensive understanding of the property, its nature and any restrictions.
- In the ACT, the contract must include a building and pest report for a house or Class B unit, an energy efficiency report and swimming pool compliance documentation (if applicable). The contract for a unit must include body corporate certificate and the last two years’ of body corporate meeting Minutes, an energy efficiency report and swimming pool compliance documentation (if applicable).
4. What’s the difference between exchange and settlement and how long does settlement take?
Exchange of contracts is the point at which the sale becomes legally binding. The buyer and the seller will sign identical copies of the contract, and these are swapped (“exchanged”) between their solicitors or conveyancers. From this moment, the cooling-off period (if applicable) begins, and the buyer typically pays a deposit, usually 10% of the purchase price, though this can be negotiated.
In the ACT, settlement generally occurs around 30 days after exchange. In NSW, the standard settlement period is 42 days. Settlement is the final step, where the balance of the purchase price is paid, the title is transferred into the buyer’s name, and the buyer receives the keys. This is when ownership actually changes hands.
5. What do the legal fees include? What are disbursements?
The solicitor/conveyancer’s fees are their professional fees including GST. Disbursements are third party expenses and include things like PEXA fees, fees for property searches, agent’s fees etc.
Professional fees cover the conveyancer or solicitor’s work in negotiating amendments, preparing documents, liaising with the other party’s representatives, and advising clients during exchange and settlement. They may also organise searches and will also be required to pay out of pocket costs to third parties such as search fees, government registration fees and other administrative costs (referred to as disbursements above).
6. What is PEXA / electronic settlement and is it safe?
PEXA (Property Exchange Australia) is Australia’s main Electronic Lodgement Network Operator (ELNO) which lets solicitors, licensed conveyancers and banks complete property settlements digitally.
On settlement day, the transfer and any mortgage documents are lodged with the land registry, and funds are disbursed electronically. In NSW, electronic settlement through an ELNO is mandatory. In the ACT, electronic settlements occur in the majority of transactions, however, settlements for purchase of blocks of land are by paper.
In terms of safety, PEXA is a regulated ELNO operating under national electronic conveyancing law with identity verification checks built into the process and real-time verification of property and title information against the land registry before settlement. Clients should always verify bank details directly with their solicitor by phone using a known number rather than relying solely on emailed instructions.
