Definition of Conveyancing
Buying and selling a home can be a confusing process. Fortunately, there are detailed systems in place and many different people who work together to make the process easier for the buyer and seller. Lenders, for instance, draw up mortgage documents and help buyers find insurance so they can purchase the home. Another important document and process is the conveyance, which deals with the contract between the buyer and the seller.
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Definition
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Conveyancing is the act of passing on particular obligations between parties during a property transaction. In other words, the seller creates specific demands for the buyer---the property price, for instance, and when the money must be paid---and conveys them to the buyer, while the buyer creates a similar set of requirements and conveys them to the seller. This is typically done via one document, with most of the conveyance being already determined through legal formality.
Purpose
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Conveyance documents are a vital part of the property transaction. These documents cement the decisions of both the buyer and the seller and represent a significant "point of no return" step. These conveyance documents allow both parties to see what's expected of them and what they're agreeing to do to complete the transaction.
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Misconceptions
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One important conveyance document is called the deed of conveyance. This paperwork should not be confused with the property title itself, which the owner actually holds. The deed of conveyance shows when and how the title will be conveyed to the buyer.
Benefits
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Conveyancing is a legal action: It binds the buyer and seller to complete the transfer of the property. This doesn't mean the converyance documents actually signify the transaction. That process happens later, when money changes hands and the title company files the change in title. But the conveyance provides a useful focus point while the details of the transaction are being worked out, especially in the finally closing date it sets.
Considerations
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Conveyancing is a binding activity and can create serious problems for the buyer and seller if one of them doesn't follow through as indicated. The buyer, for instance, may still have to pay some or all of the closing costs if he reneges on the deal, which could amount to several thousand dollars.
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