If you are buying or selling a property, you?ll need to satisfy a range of legal requirements in order to transfer its ownership from one person or entity to another. This work, called conveyancing, comes with costs and requires a few crucial choices to be made.
All about conveyancing
Conveyancers are qualified professionals that specialise in all aspects of property dealings. In addition to ownership transfers, they prepare and lodge all the documents required to complete a property transaction, including the contract of sale and transfer of land document. And most importantly, they conduct vital searches that can reveal new information about the property.
For example, they will look for planning restrictions and zoning regulations that could affect a property?s value, whether any government authority has a vested interest in the land or if there is any unapproved construction on the land.
Conveyancing services also include providing advice on what?s required of you by state and federal law and on how to go about arranging building and pest inspections or paying the stamp duties. In addition, conveyancers will keep the buyer?s deposit money in a trust account, work out how to adjust the rates and taxes between buyer and seller, liaise with banks and other financiers and oversee the final settlement of the property.
Conveyancers specialise in property law. To do so, they must have completed a minimum two years? study at tertiary level in this area and have had at least two years? supervised practical experience in conveyancing before they can apply for a conveyancing licence. Then, they must undertake ongoing professional development each year to retain that licence. However, the specific requirements may vary, depending on each state?s or territory?s conveyancing Act.
It isn?t mandatory to hire a conveyancer and it isn?t against the law to do your own conveyancing work. However, conveyancing work is highly technical and specialised. It involves a lot of administrative tasks such as making phone calls and sending off letters. If you are comfortable dealing with government departments, banks, legal documents and legal terminology, have the time needed and are on a tight budget, you could do the legal work yourself by using one of the DIY conveyancing kits available online for states such as New South Wales, Victoria and Queensland.
This type of low cost conveyancing provides a breakdown of what you need to do to complete the conveyancing process. Sometimes it also comes with phone support.
However, the Australian Institute of Conveyancers SA Division (AICSA) warns against doing your own conveyancing unless you know precisely what to do and are certain that you have the capacity to do it. It cautions that you cannot expect any assistance from the conveyancer acting for other party.
?If you make an error, you may cause settlement to be delayed (causing default interest to be payable by you) or even enable the other party to terminate the contract,? says the AICSA.
?Conveyancing is an expert's job: to be safe, you should engage an expert. Remember, you are buying peace of mind for just a few hundred dollars.?
If you have an established relationship with your own lawyer, you might prefer him or her to do the work. A lawyer is also a better choice if the transaction is likely to be complex or to become litigious.
Like conveyancers, conveyancing solicitors are able to oversee any straightforward property transaction. That?s because they have studied property law for six months during their law degrees. If not, they may use law clerks or licensed conveyancers to complete the conveyancing transaction on their behalf.
But unlike conveyancers, solicitors are also able to deal with the more complex legal issues that sometimes raise their ugly heads in property deals. They can, for example, give you vital legal advice beyond conveyancing on matters such as estate issues, tax implications or how a property deal may affect divorce proceedings.
In contrast, conveyancers must refer a transaction to a solicitor for help if it moves beyond the scope of property law.
Some conveyancers are self-employed or work in small businesses. Others work in bigger companies and solicitors' offices. Some offer a wider range of services than others. And they set their own fees for conveyancing, although these can be negotiable.
Like other professional services, the costs vary, depending on what?s needed, who you use, the type of property involved and the state or territory it is based in.
A DIY conveyancing kit is likely to be the cheapest option, costing between $80 and $150.
Licenced conveyancers usually charge a fixed fee for their services, which is often less than the costs of using solicitors, many of whom charge by the hour. Some conveyancers, however, may a sliding fee based on the property?s sale price.
Generally speaking, conveyancing fees can range from anywhere from $500 to $2,200.
Then there are disbursement costs ? the expenses a solicitor or conveyancer may need to pay to third parties on your behalf. These include fees for settlement, certificates and various searches, including on council or water rates, roads, land tax searches and heritage listings.
There could also be out-of-pocket costs for miscellaneous charges for photocopying, faxes, postage, stationery, phone calls and other administrative expenses. By some estimates, usual disbursements for property purchase can cost $270 upwards while those for sellers could start at $280.
According to Australian Institute of Conveyancers NSW Division (AICNSW), some examples of disbursements and their estimated charges are:
- Title Search $20 - $100
- Local Council Building Certificate $250
- Local Council S149 Certificate $53 - $133
- Drainage Diagram $25
- Sydney Water, rates certificate $20-$25
- Local Council, rates certificate $65
- Land Tax, clearance certificate $20-$25
- Department of Education $20-$25
- Environmental Protection Authority $20-$25
- Roads & Traffic Authority $20-$25
- Transgrid, electricity/power stations $20-$30
- Postage, stationery, faxes $20-$40
- Local Council Pool Compliance/Non-Compliance Certificate $150-$450
- Other costs, depending on the transaction.
When you look at a quote, you want to see exactly how much it will cost you. The fee should give you a breakdown of the services provided and the quote should make clear what the disbursements cost range will be.
While costs are undoubtedly important, there are other factors to consider when shopping around for a conveyancer or solicitor, including experience, location, reputation and the level of service provided.
When deciding on whom to choose, consider your budget, the complexity of the transaction and your needs, as well as your own abilities to deal with legal issues. Also remember that this is likely to be one of the more significant transactions you will make in your lifetime and consider the risks of not getting it right.
You also don't need to wait until you are ready to sign a contract. It makes sense to select your conveyancer or solicitor as soon as you decide to buy or sell a property.
To help you choose a conveyancer, the AICSA suggests you explain your requirements to two or three conveyancers and ask them a range of questions such as:
- Are you a member of the Australian Institute of Conveyancers?
- What's the maximum I can expect to pay in fees and charges?
- What are your fees and what services are included in those fees?
- What will any additional services cost?
- What government fees and charges will I need to pay?
- How long will settlement take?
- How will you keep me up to date with what's happening?