The process of buying and selling residential property is called residential conveyancing. This is a legal process that regulates how properties are bought and sold, for the purpose of protecting property buyers and sellers.
Residential conveyancing is a three-step process that includes the agreement to sell, the exchange of contracts, and the completion of sale. All three of these steps must be completed in order to finalise the sale and transfer the property from the seller to the buyer. It's not strictly necessary for a solicitor to be involved in residential conveyancing, but both buyers and sellers of residential property may find it useful to have legal representation during this process.
Agreement to Sell
The residential conveyancing process begins with the agreement to sell, when the property seller accepts a buyer’s offer. At this stage, the buyer must carry out several public records searches that confirm the property can legally be sold, and that there are no problems that might affect the property in the future. The buyer also arranges for a property valuation and inspection, and finalises their mortgage. Meanwhile, the seller must complete certain documents to provide information about the property.
Exchange of Contracts
In this stage the buyer must pay down a deposit on the property. Next, the buyer and seller each sign the purchase and sale contracts for the transaction. After this happens the sale is considered final. Neither the buyer nor the seller can back out of the sale without incurring some kind of penalty, as stipulated in the contract. The only exception is under contractual conditions, such as if the home inspection reveals major problems with the home or property.
Completion of Sale
In this third and final stage, a date is set on which the property legally changes hands. On this date, the buyer sends the balance of payment to the seller. The seller receives this money and uses it to pay their own mortgage, if they have one. Finally, the seller signs the transfer deed, and forwards it to the buyer, who also signs it. The buyer is then officially the new owner and can be registered as such.