So you’re in the beginning stages of a real estate transaction or have already started the conveyancing process and the professionals you are dealing with tend to be using some language you don’t understand.
Do you let it slide or should you ask questions?
Definitely ask questions.
Conveyancing is a legal process of transferring the title of a property from one person to another. This means there is bound to be some legal terminology or jargon associated with the documents and conversations. And, as buying property is possibly one of the largest financial investments you’ll ever make its important you understand the terminology used throughout this legal process.
Common legal terms you’re likely to come across during the conveyancing process include:
Contract of Sale
This is a document that is signed by both the buyer and seller of the property being sold. It is signed once all of the terms and conditions of the sale have been defined and agreed upon. This may include the sale price, deposit amount and the settlement date.
The vendor (or person selling the property) must prepare an official statement for the purchaser (or buyer) outlining all of the particulars of the property being sold. This should include the amount of outgoings and rates for the property. This ensures that the purchaser knows what their financial obligations will be.
Cooling off Period
After the buyer signs the Contract of Sale there is a short grace period; three days in most cases where the purchaser may change their mind. During this cooling off period the buyer is entitled to terminate the Contract of Sale without risk of being sued by the vendor. However, there may be financial penalties for backing out the contract, so this is something you should discuss thoroughly with your conveyancer, real estate agent or solicitor.
This is the date when the purchaser pays the balance of the predetermined purchase price to the seller. At this time, the seller gives the purchaser all of the legal documents required to transfer the property to the purchaser’s name.
tatement of Adjustments
During the transitional process from one party to another there may be some overlap of fees for such things as council and water rates. The Statement of Adjustments is a document that states any adjustments between the seller and the buyer. It helps to ensure that the seller continues to pay for any of the outgoings whilst they are still in possession of the property and that the buyer pays for these outgoings when they take possession.
The team at Real Asset Conveyancing recommend you clarify these terms with the help of a professional conveyancer, such as themselves, a licenced real estate agent or a solicitor. This will ensure you know what your rights and responsibilities are, and hopefully give you peace of mind.