FAQs about Conveyancing when Buying & Selling Property
Frequently Asked Questions
Do you have Questions? We have Answers.
At Bush to Beach Legal we are property lawyers and solicitors which means we get lots of questions about buying and selling residential and commercial property.
We’ve compiled some of our Frequently Asked Questions below.
FAQ - Conveyancing
1. Do I need a Conveyancer?
Consider reading our guide – ‘Do you need a Conveyancer when buying your first home?‘
For the short version. Conveyancing may seem like a simple process, but in reality, it is a complex transaction that involves many parts. For many people, the sale or purchase of their home is also one of the largest financial transactions they will make in their lifetime, so it is critical that it is done properly, by an experienced professional, who is trained in the process.
Trying to do it yourself may be the biggest mistake of all. To ensure a smooth and cost-effective transfer, why not use trained property legal solicitors? You’ll pay a little more now but save in the long run.
2. Building & Pest Inspections – Do I really need to do one?
Consider reading our in depth guide – ‘7 Things you need to know before buying Residential Property in Queensland?’
Would you buy a car without taking it for a test drive? For most people the answer is no! So, why would you buy a home without obtaining a pest inspection?
One of the most frequently asked questions our property team at Bush to Beach Legal are asked is, should we get a pest or a building inspection? Our answer is always a resounding YES!
As a general rule, building and pest inspections are a great idea. Not only will they assist you in terms of acquiring vital knowledge about the state of the property you are buying, removing the fear of the unknown but they are also fantastic in providing a form of recourse against the inspector if problems do arise.
Smart buyers use building and pest reports to determine if any issues with a property can be overcome, and the cost of necessary rectification. With this information as a purchaser, you can then make an informed decision about how to proceed with the purchase and, if needed, look to the seller for compensation.
3. Private Treaty or Auction – What is the difference?
Private Treaty’s and Auctions describe two of the most common ways to sell a property. Each has its own pros and cons, which you will need to consider and discuss with your selling agent, prior to placing your property on the market.
Sale by Private Treaty is where potential buyers make an offer by way of advertisement. A private sale is a less expensive option that can often achieve a faster result. Interested parties can immediately put in their offer instead of waiting for the auction date. Generally, this method of sale will also only attract those who are genuine buyers, many of which can be put off by the urgency of an auction.
In contrast an auction will allow you more control as you will have the ability to set the reserve price and settlement date. Auction advertisements will also allow potential buyers to make an offer prior to auction day. Typically, when a property is sold at an auction, the buyer will not be able to negotiate the terms of the contract and will be asked to sign it immediately.
There is also no cooling-off period when a property is sold at auction. This means that the purchaser cannot withdraw, and the sale must proceed. In some circumstances, the purchaser will negotiate a special condition such as ‘subject to finance’ or ‘subject to building inspection’.
4. What is a Caveat & Do I need one?
A caveat serves as a warning to the world that a person claims an unregistered interest in the land and the title may not be transferred without the consent of the caveator. It is basically a note on the title to prevent any other person from taking possession of the property.
In order to place a caveat on a property the caveator must have a valid legal interest in the property, this can include purchasing the property having signed a contract of sale, and we at Bush to Beach Legal can place a caveat on a property should you wish to do so.
This process however is becoming less common, particularly with the speed in which property transactions are now settled.
5. Is Pre-Approval the same as Unconditional Approval?
Pre-Approval and Unconditional Approval are two very different things when it comes to securing funding to complete a property purchase and is something all purchasers should be aware of.
Pre-approval generally means that the lender has approved you but not necessarily the property and finance may be subject to a property valuation. Unconditional approval is where your loan has been approved and your lender has agreed to loan you the funds to complete the purchase.
If you are obtaining finance to complete a property purchase, it is absolutely essential that unless you are purchasing a property at Auction, you make your offer to purchase “subject to finance” as that will allow you to terminate the contract of sale if your bank doesn’t approve finance.
6. What is a License Agreement?
Licence agreements are legal contracts, whereby the parties being the licensee and the licensor agree to the licensee having occupation or the right to use the property.
Licence agreements are commonly used in circumstances where the purchaser of a property would like to move furniture into the property they are purchasing prior to settlement. Alternatively, a licence agreement can also allow the vendor to remain at the property once settlement has been completed.
Both parties must consent to the agreement, and it is important to note that neither party are under an obligation to agree to a licence agreement.
As a licence agreement is a legal contract it is important that a qualified and experienced legal practitioner prepare the document, which will ensure the terms reflect the agreement made between the parties.
7. What is a VOI and why do I need to do this?
Verification of Identity (VOI) is a process that must be undertaken as part of the conveyancing process when you are buying, selling or dealing with property. Whilst this may seem like a burden, having to get a variety of documents together to prove you are who you say you are, this process is actually for your benefit, and will assist in preventing fraudulent transactions, keeping your assets safe.
Traditionally the VOI process has taken place via face-to-face meetings in our office. However due to the covid-19 pandemic and developments in terms of electronic conveyancing, it is now possible to complete this process remotely.
The good news for those who buy and sell frequently is that VOI’s only need to be updated every two years, so it is not necessary to re-complete this process for each and every transaction
8. What is a contract of sale?
The contract of sale is the most important document in the conveyancing process as it outlines the terms and conditions as agreed on by the vendor and you. It must be in writing and signed by all of the parties involved, either personally or pursuant to an instrument, for example a power of attorney.
The contract is normally prepared by the vendor’s solicitor. However, details such as the sale price and settlement date are generally completed when the parties are signing the contract of sale.
Provided that the vendor agrees, the contract may be conditional such as ‘subject to finance’ or ‘subject to a building inspection’. The sale will only proceed provided that the conditions are met. For example, if your finance has not been unconditionally approved, a ‘subject to finance’ condition will allow you to end the contract without penalty if the loan application is refused. Importantly, special conditions such as these carry an expiration date so you must do everything necessary to obtain finance before this time. Occasionally, the vendor may agree to an extension, but you would need to lodge a written request prior to the expiry to avoid heavy penalties.