A Step-by-Step Guide for Purchasers & Vendors
Understanding the Property Transfer Process in NSW
Are you buying or selling property in NSW? This article explains the conveyancing process which all purchasers and vendors need to go through. Conveyancing is the legal process of transferring property ownership from one person to another. Our comprehensive guide explains what conveyancing is, why it's essential, and walks you through the entire conveyancing process step by step.
What is Conveyancing?
Conveyancing is the legal and administrative process of transferring property ownership from a vendor to a purchaser. It involves preparing, verifying, and lodging various legal documents with Land Registry Services to ensure the property transfer is valid under NSW law. This process protects both parties by ensuring all legal requirements are met and that the purchaser receives clear title to the property.
The conveyancing process typically begins when a purchaser's offer is accepted and continues until settlement when the keys are handed over. Every property transaction in NSW requires conveyancing, whether you're buying your first home, selling an investment property, or transferring ownership within a family.
The Conveyancing Process Explained: Step by Step
For Purchasers
1. Pre-Exchange Stage
- Initial property inspection
- Review the Contract for sale and purchase of land
- Mortgage pre-approval
- Obtain a building and pest inspection report or, if buying in a strata complex, obtain a strata inspection report
- Conduct preliminary inquiries about the property, such as reviewing Council’s records and the DA tracker for the area
- Make an offer on the property you want to purchase!
- If your offer is accepted (or you are the successful bidder at an auction), you will proceed to an exchange of contracts which is outlined below
2. Contract Exchange
- Negotiating special conditions if needed and any other amendments to the contract, for e.g. date for settlement. You lawyer or conveyancer will do this on your behalf.
- Reviewing and understanding the contract before signing – you will meet with your property lawyer or conveyancer for a contract review meeting
- Signing the contract of sale
- If required, your lawyer or conveyancer will provide a s 66W certificate to waive your cooling off rights – this means the contract is binding and unconditional on all parties on exchange of contracts or retaining your rights to cool off and paying 0.25% of the purchase price
- Paying the deposit to the real estate agent, usually 10% of the purchase price
- Your signed contract is sent to the vendor for exchange and if both contracts are identical, contracts are dated and exchanged!
3. Pre-Settlement Phase
- Conducting property searches and inquiries
- If you are obtaining finance, you will sign any loan documents
- Your lawyer or conveyancer will work with your lender or broker to ensure that finance is ready to go on settlement day
- Your lawyer or conveyancer will prepare a settlement adjustment sheet which will include adjustment calculations for rates, taxes, and strata fees (if applicable)
- Your lawyer or conveyancer will advise you of the amount of money you need to settle – this will include the purchase price, any adjustments, stamp duty payable under the contract and registration fee
- Arranging home and contents insurance
4. Settlement Day
- Conducting a final property inspection
- The lawyers will sign off on the PEXA workspace and you pay the balance of the purchase price to the vendor and any adjustments between the parties, such as council rates, water rates and usage – all of this is done electronically via the PEXA platform
- The transfer is lodged with NSW Land Registry Services and any discharge of mortgage from the vendor is registered and if you have a mortgage then it is registered at this time too.
- Receiving the keys to the property – time to celebrate!
For Vendors
1. Pre- Exchange Stage
- Selecting a real estate agent to market and sell the property
- Entering into an agency agreement with the real estate agent
- Preparing the property for sale
- Instructing your lawyer or conveyancer to prepare a contract for sale and purchase of land – your agent needs a contract before they can market your property for sale
- Your lawyer or conveyancer will ask you lots of questions to prepare the contract for sale to ensure that you comply with your vendor disclosure obligations
2. Contract Exchange
- Accepting an offer from a purchaser
- Responding to any queries raised or amendments sought to the contract for sale which the purchaser requests – you can expect your lawyer or conveyancer to seek instructions and they will respond to the purchaser’s lawyer or conveyancer
- The purchaser will pay the deposit to the real estate agent
- You will sign the contract. If you allow the purchaser to have a cooling off period – the purchaser pays 0.25% of the purchase price on exchange and the balance of the deposit at the expiration of the 5 business day cooling off period
- During the cooling off period, only the purchaser can rescind the contract. The property is off the market during the cooling off period
- If no cooling off period – your lawyer or conveyancer will receive a s 66W certificate from the purchaser’s lawyer or conveyancer and proceed to an exchange of contracts - all parties are bound by the contract on exchange of contracts
3. Pre-Settlement Phase
- If you have a mortgage on the property, you will need to sign the discharge authority and any other documents to ensure that a discharge of mortgage is prepared
- Your lawyer or conveyancer will prepare a settlement adjustment sheet – this contains the calculations of the money the purchaser must pay to you on settlement
- Allowing the purchaser to conduct a pre-settlement inspection
- Ensuring that the property is in the same condition as at exchange, subject to fair wear and tear
4. Settlement Day
- Providing vacant possession of the property (if not selling with a tenant)
- Your lawyer or conveyancer will advise you the balance of the settlement proceeds to be received and sign off on the PEXA workspace
- If there is a mortgage on the property, the discharge of mortgage will be lodged with NSW Land Registry Services (via the PEXA platform), you will receive the money owing to you and the property will be transferred into the purchaser’s name. All of this is completed electronically in PEXA.
- Following settlement in the PEXA platform, an order of agent will be sent by your lawyer or conveyancer to the real estate agent and they will release the balance of the deposit to you, less their commission
Common Conveyancing Costs in NSW
- Conveyancing costs can vary depending on the property's value, location, and transaction complexity. Typical expenses include:
- Professional fees for the lawyer or conveyancer
- Search fees (various property and government searches)
- Registration fees
- PEXA fees
- For a purchaser, a significant expense is stamp duty (varies by state/territory and property value)
- Adjustment costs for rates, taxes, and strata fees
- Conveyancing is typically charged as a fixed-dees and can range $999 to $2,500 or more depending on the complexity of the transaction and nature of the property.
Benefits of Online Conveyancing
- Often more affordable
- Very convenient to access quality legal services
- Increased speed of access to a lawyer or conveyancer – no travel time
- Convenient digital document signing
- Real-time transaction tracking
- Faster communication
Common Issues During the Conveyancing Process
- Even with professional help, issues can arise during conveyancing:
- Undisclosed building works
- Planning restrictions
- Outstanding council notices
- Finance delays
- An issue arises at the pre-settlement inspection
- Purchaser or Vendor is not ready to complete on settlement day. For e.g. If a vendor is not ready to complete, and a purchaser is ready to move in, there can be issues.
- On the day of settlement – if there are delays, the PEXA platform re-sets the time for settlement every 30 minutes.
A skilled property lawyer or conveyancer can help navigate these challenges and find solutions that protect your interests.
Tips for a Smooth Conveyancing Process
- Start early - Engage an experienced property lawyer or conveyancer as soon as you decide to buy or sell.
- Ask questions - Don't hesitate to seek clarification about any part of the process.
- Respond promptly - Quick responses to requests for information keep the process moving.
- Be thorough - Review all documents carefully before signing.
- Budget properly - Account for all potential costs, including stamp duty and registration fees.
Final Thoughts
Conveyancing is a critical part of any property transaction in Australia. While the process may seem complex, understanding the steps involved helps ensure a smooth transfer of ownership. Whether you're a first-time buyer, an experienced investor, or selling your family home, professional conveyancing services provide peace of mind and legal protection during one of life's most significant financial transactions.
For personalised advice about your specific property transaction, contact our team of experienced conveyancers who can guide you through every step of the process.
Ready to Start Your Conveyancing Journey?
Contact ClickLaw today for a free consultation about your property transaction needs. Our experienced team will guide you through every step of the conveyancing process, ensuring a smooth and stress-free property transfer.
