The conveyancing process for purchasers

It may sound obvious, but you need to put an offer to the vendor and they need to accept it. Sometimes there will be multiple buyers who will each put forward their offer, which may include their price and any conditions applicable to that price. For example, you might be able to offer $310,000, subject to finance, but another buyer might make an unconditional offer of $300,000. The vendor will not always accept the highest price if they're not happy with the conditions, so sometimes there can be a bit of back and forth in the negotiation process.

Agents sometimes request offers in writing, and how this is done will depend on the agent. It might be by way of an email to the agent stating your offer, the agent might provide you with a specific form to fill out, or something that is becoming more popular lately is submitting your offer in the form of a signed contract. Although an agent may tell you that this is just so the vendor can compare serious offers from buyers, you need to be aware that you are signing a legally binding contract. You should not put in an offer in the form of a signed contract that does not completely reflect the conditions on which you intend to purchase the property. For example, if you need finance in order to complete the purchase, and you want to have building and pest inspections done, do not sign a contract without these conditions, even if the agent tells you it's just an offer. You will not be able to add these conditions later, and you could find yourself locked into an unconditional contract with nothing to protect you.

You need to get advice before you sign a contract to purchase property. It is up to you whether you seek advice before making an offer, or only after your offer is accepted. However, if you are making an offer in the form of a signed contract (see above), you need to get advice before you submit an offer in this format.

In the usual scenario, which involves a non-binding offer and then a contract being prepared for you, the agent might ask you who will be acting for you or representing you in relation to the purchase. This is a good time to give me a call and let me know that you've purchased property and the agent will be sending documents to me to look over. Once I receive the documents from the agent, I usually let you know that I have them, and advise a rough time frame for providing my written advice to you. After you've received and reviewed my written advice, ask any questions you need to. There are no stupid questions, and it's important that you understand what you are signing, so I am happy to discuss matters with you as much as necessary to ensure you are comfortable with the transaction and it's what you want.

The exciting part comes next - signing on the dotted line. Pre-covid, agents would often meet with buyers to sign contracts in person, but now it's typically done electronically by sending a link to a contract online. If you have previously received advice based on a different version of the contract, you need to make sure that the version you are signing matches the version you gave to me to review. In particular, check that all dates, amounts and special conditions match on both versions.

As the purchaser, you will sign the contract first. This ensures that if you need to add anything when signing, for example, a special condition, that the vendor will still have the right to decline to sign, and then contract will not proceed.

After a binding contract is in place, the work of preparing for settlement starts. Depending on the transaction, sometimes you will have a lot of involvement in the process, and sometimes you will have very little.

Some things that might need to be undertaken or arranged by you once you have signed a contract to purchase a property are:

• Obtaining loan approval

• If you're not obtaining a loan from a financial institution, figure out where your funds are coming from - do you need to terminate a term deposit, sell some shares, consolidate personal funds from various sources?

• Arranging a building practitioner to undertake a building inspection

• Arranging a pest inspector to undertake a pest inspection

• Measure the physical dimensions of the property and check these against the plan attached to the contract.

Keep in mind that you will need the vendor's permission to access the property for things like inspections and measuring.

Although you may not hear from me during this period, I will be working away behind the scenes, conducting property searches and obtaining certificates, preparing documents, and often liaising with your lender or broker regarding finance approval. If any issues arise along the way, for example a requested change to the contract, settlement date, etc. then I will liaise with you and the vendor's representative to facilitate such changes.

If you've got a long settlement (say, 90 days), you'll find that things might go quiet in the middle for a little while but then get quite busy in the last week or two prior to settlement day.

You are entitled to inspect the property in the week prior to settlement. This inspection is usually arranged through the real estate agent, but if there is no agent then it can be arranged directly with the vendor or via their lawyer. At this inspection you should be checking that everything in the property is in the same condition that it was in as at the date you signed the contract, fair wear and tear accepted. All appliances, if working at the date of the contract, should still be working. However, the flipside to this is that if something wasn't working at the date of the contract, you can't expect the vendor to fix it prior to settlement. For this reason, it's a good idea to take notes, photos, and perhaps even video at your initial inspection of the property before you sign the contract, so you will remember the condition of the property when you go to do your final inspection.

Also in the week prior to settlement, you will likely be asked to review and approve a statement of adjustments. Once approved, a final figure will be given for the amount required to settle. Funds for settlement are provided in a number of ways:

• You may be borrowing the entire amount required for settlement from a financial institution - if this is the case, your bank will be advised of the amount required for settlement, and you will not be required to provide any additional funds.

• Often, your lender will not be providing all funds, and you will be required to also contribute to the amount due at settlement from your own funds. This is done in one of two ways:

  • Your bank may ask you to sign an authority which allows them to take the additional funds required from a savings or transaction account you hold with them. You will need to make sure the amount required is available in the nominated account at least a couple of days prior to settlement.

  • If your bank doesn't ask you for this authority, you may need to pay the additional funds into your lawyer's trust account, so that your lawyer can then contribute those funds to settlement on your behalf. If providing funds to my trust account for settlement, you will need to arrange payment at least three business days prior to settlement to ensure funds are cleared in time.

• If you're not borrowing any funds for settlement, you will need to place the entire amount required in your lawyer's trust account at least three business days prior to settlement.

Almost all property transactions in Victoria are now carried out electronically, most commonly on a platform called PEXA (although there are others). To put it simply, PEXA is basically a website that all parties to a settlement (lawyers and banks) can log in to, to arrange all of the transactional requirements for settlement. Documents are created and signed electronically, and funds are moved between various accounts to effect settlement.

Settlement is set for a particular time of day in PEXA, but for various reasons any matter may "roll over" to a later settlement time if it is not ready to settle at the scheduled time. I will advise you in the days prior to settlement what time the settlement is scheduled to occur, but I cannot guarantee that it will occur at that particular time. It is therefore very important that you have a backup plan in place if your settlement day plans include moving into your new property.

After settlement has occurred, I will call you to confirm that you now own your new property! Settlement often takes 30 minutes or more to be completed, so please do not panic if you don't hear from me straight away.

If you have borrowed from a financial institution to complete your purchase, there will likely be a mortgage registered on the title and therefore your title to your new property will be held by your lender. Alternatively, if you have provided all funds yourself, your title will issue to me. Victoria is now issuing electronic certificates of title which can only be held by an "ECT controller", meaning the person who controls the electronic certificate of title. You can leave your ECT in my custody, where it will remain until you (a) sell the property (b) request that I transfer ECT control to another subscriber (i.e. another lawyer or bank), or (c) request a paper title. If you obtain a paper title, you will need to arrange secure storage of this yourself. I do not recommend this as the cost of replacing a lost paper certificate of title can be significant.