Whether you plan to buy or sell a property, you may feel a bit overwhelmed by the new terminology you hear during the sale. While you don’t have to complete a course in conveyancing law to successfully complete a real estate transaction, understanding some common terms will help you navigate the process.
Here are ten of the most common conveyancing terms you should know.
A property’s Certificate of Title is a legal document that summarises all information about the property’s ownership. The certificate of title includes the names of the owners.
Additionally, the document includes any particulars about the title, including any relevant mortgages.
When conveyancers use the term “contract” they will be referring to the written agreement between the buyer and seller setting out the terms of the sale such as the price and deposit. The contract of sale also includes a copy of the Council planning Certificate and a sewer diagram.
Typically, a Lawyer or Conveyancer prepares the contract of sale.
When your conveyancer in NSW refers to a “cooling off period” they are referring to the grace period after the commencement of the contract. This period is 5 business days and allows you, as the purchaser, to cancel the purchase prior to the expiry of this period.
You will incur a charge of 0.25% of the purchase price if you exercise your rights under the cooling off provisions.
Not all transactions include a cooling off period. For example, if you buy a property at auction, you have no cooling off period.
Prior to or upon entering into a contract to purchase in NSW you will need to pay a deposit. Typically the deposit will be 10% of the purchase price but often the seller will agree to a 5% deposit.
The term “disbursements” include fees your conveyancer incurs on your behalf that are not part of their professional fees. Disbursements include the costs of title searches and other fees charged by Government agencies to provide information about the property.
Requisitions are queries raised by a purchaser of a property concerning the seller’s title and other matters regarding the property.
Contracts for sale in NSW make provision for requisitions however some sellers amend their contracts to restrict the requisitions which can be raised.
When a real estate transaction concludes and a property transfers from the seller to purchaser this is known as a settlement.
The settlement occurs on a specified day known as the settlement date. On the settlement date purchasers pay the balance of the purchase price and in return receive a signed transfer document from the seller and the Certificate of Title.
This is a levy or tax imposed on the Purchaser of real estate by a State or Territory. As such, the amount due will depend on which State or Territory the property is located.
Properties continue to accrue costs such as Council and water rates throughout the period of the conveyance.
The settlement statement sets out the price of the property then deducts the amount of deposit already paid by the purchaser and also adjusts the costs such as Council rates and water rates between the buyer and seller.
This will ensure that the seller pays the proportion of such costs up to the date of settlement and purchaser pays such costs from the settlement date.
This usually refers to entering into a contract to buy a property subject to a dwelling being constructed by the seller or where a block of land is being purchased subject to the block being subdivided from a larger block of land.
Completion of the purchase usually takes place after the building is completed or the land has been subdivided.
There are many risks with such purchases and buyers should always seek advice from an experienced Property Lawyer or Conveyancer prior to entering into such contracts.