Conveyancing is the act of transferring the legal title in a property from one person
to another. The buyer must ensure that he or she obtains a good and marketable
'title' to the land; i.e., that the person selling the house actually has
the right to sell it and there is no factor which would impede a mortgage or re-sale.
A system of conveyancing is usually designed to ensure that the buyer secures
title to the land together with all the rights that run with the land, and
is notified of any restrictions in advance of purchase.
A typical
conveyancing transaction, whether a sale or purchase, contains two major 'landmarks',
which are exchange of contracts (whereby equitable title passes) and completion
(whereby legal title passes), plus the three stages: before contract, before
completion and after completion.
In most mature jurisdictions,
conveyancing is facilitated by a system of land registration which, in the near
future, is likely to lead to widespread (if not mandatory) use of electronic
conveyancing.[citation needed]
The conveyancing process in the United
States varies from state to state depending on local legal requirements and historical
practice. In most situations, three attorneys will be involved in the
process: one each to represent the buyer, seller, and mortgage holder; frequently
all three will sit around a table with the buyer and seller and literally "pass
papers" to effect the transaction. (Some states do not require all parties
to be present simultaneously.) In order to protect themselves from defects in
the title, buyers will frequently purchase title insurance at this time, either
for themselves or for their lender.
In most states, a prospective buyer's
offer to purchase is made in the form of a written contract and bound with
a deposit on the purchase price. The offer will set out conditions (such as
appraisal, title clearance, inspection, occupancy, and financing) under which the
buyer may withdraw the offer without forfeiting the deposit. |
