Discussing Caveats as Security: A Guide for Agents

We aim to make property transactions easier not just for buyers and sellers, but for agents as well. Guiding your client through the complexities of selling and purchasing property can sometimes feel overwhelming, so it’s important we help support you, the agent, wherever we can.

This article covers how to communicate the benefits of our service with your clients, specifically regarding caveats. Misunderstandings often arise around this type of loan security, so by introducing the concept early, explaining how it streamlines the settlement process and addressing any concerns, you can help your clients feel more confident and informed about the process.

1. Be clear and upfront from the beginning

When discussing financing with the seller, it’s essential to be transparent about Property Credit’s loan process including the possible use of caveats. Introduce the concept when explaining the loan structure, emphasising that it’s a routine part of securing financing for a property transaction.

For example:

“As part of the loan process, Property Credit may register a caveat on your property, which essentially acts as security for the loan. This is a standard procedure that ensures everything goes smoothly on the day of settlement.”

It’s important that you and your seller (the borrower) keep us informed throughout the sale process. Notifying us of any changes to things like settlement dates, ensures smooth coordination, and helps prevent delays in the funding process.

2. Reassure clients: It’s one less thing to worry about

Clients might initially worry about what lodging a caveat means in regards to their property sale. Reassure them that it simplifies the process rather than complicates it, especially at settlement.

Having the caveat in place means that when the sale goes through, everything is taken care of automatically in one step, including the withdrawal of the caveat. It’s one less thing for your client to manage.

For example:

“The caveat is nothing to be concerned about—it actually makes the process easier. With the caveat in place, your solicitor or conveyancer will handle the repayment and withdrawal through the PEXA system on the day of settlement. This way, you won’t have to worry about transferring large sums of money or making re-payments yourself.”

3. Address common misconceptions

It’s common for clients to believe that having a caveat registered on their property might complicate or delay the sale.

Be sure to clear up any misunderstandings and reassure that it’s actually an efficient way to handle the repayment and security process.

For example: 

“I understand some people think that a caveat could prevent the sale from going through, but that’s not the case. The caveat is simply there as security for the loan, and it will be automatically withdrawn on the day of settlement. The process is very smooth and won’t affect the timeline of your sale at all.”

4. Explain how the caveat and repayment works in PEXA

For clients who are unfamiliar with the legal and technical details, it can be helpful to explain the role of the PEXA (Property Exchange Australia) system and how it streamlines both the caveat withdrawal and the repayment process.

For example:

“On the day of settlement, the entire process will be managed in the PEXA workspace. Before settlement, our legal team will reach out to your solicitor or conveyancer to make sure everything is set up properly. At settlement, repayment and caveat withdrawal happen simultaneously in PEXA, ensuring everything is finalised on time. It’s a fully automated system — you won’t need to worry about making any manual payments or coordinating the caveat removal. It’s all done for you.”

5. Provide ongoing support and clarity

It’s essential that your clients feel supported throughout the process. Let them know that they can always reach out to us with questions and that our customer service team is here to help!