Conveyancer? Land Solicitor? What are they and do I need one? You have found the property! And by now you’re exhausted, you really just want your weekends back! And you really, really want to unsubscribe to all those “Real Estate experts” and websites that just keep spamming your inbox!.. Hey I’ve found your next home….No thanks I’ve already found it myself (as you puff out your chest) and hit that ridiculously small Unsubscribe button at the bottom.
A huge congratulations are now in order!! You’ve managed to find the right home or property for you and even managed to negotiate the price – now what? This is where expert advice is paramount. Now I am not saying that you couldn’t do it on your own. There are conveyancing and legal kits available but if you are like me, I would much prefer to pay a qualified and specialized person or company to handle it on my behalf…after all there is quite a substantial amount of money at stake.
In Australia (and throughout the world for that matter) there are a few different names given to these highly specialized professionals, but in essence all do the same thing. The most common are Conveyancer, Attorneys, Land Solicitor, Property Solicitor, Lawyers and the list can go on.
Before we get all technical let’s first establish what Conveyancing is; Wikipedia and the dictionary describe it as: “In law, Conveyancing is the transfer of legal title property from one person to another, or the granting of an encumbrance such as mortgage or Lien.”
There are typically 3 stages to the overall transaction of property, they are:
- Before the Contract
- Before Completion
- After Completion
Before the Contract:
A typical real estate transaction will take normally around 4-6 weeks to complete. This depends on the complexity of the deal, for example; if financing is involved, cash only sale, the sale and settlement of another property etc. That is from signing of the contract to the settlement day – where you take possession of keys and the property.
It is a good idea that when organising your finances you ask questions to your bank or mortgage broker around settlement scenarios. They will always guide you as to how long a settlement will suit your specific circumstances and more often than not can recommend a good conveyancer to use inconjuction.
The main reason for knowing your settlement period is this can give you the edge when negotiating. For example if you have offered exactly the same as another interested party on a property but you have a more flexible settlement period i.e. you can settle quicker, this may suit the vendor and in-turn placing you in a winning position.
On the flip side knowing your terms and settlement period can save you enormously on fees and penalties. For example when we purchased my first home it settled 6 weeks late! This was due to the mortgage broker but that’s for another day…As technically it was the purchasers fault (mine), we had to pay penalty interest on every day (yes calculated daily) that the vendor had accumulated on their home loan until the property actually settled. Other penalties could have applied but luckily for us! Our conveyancer negotiated that only interest was charged. That said it still ran into a couple of thousand dollars 😥 But without a conveyancer it would have been much worse.
If you have engaged a conveyancer prior to negotiation stage, for a fee they can provide the necessary Contract of Sale and Form 1’s if you are selling or buying privately. You’ll find more often than not most real estate agents facilitate this on behalf of all parties.
In my opinion this is where they earn every penny! This stage is when all parties will sign and exchange the Contracts, Form 1’s and any other legal paperwork that maybe required in that state or country. A conveyancer will:
- Prepare all legal documents
- Liaise with all finance companies, brokers or banks.
- Check for Encumbrances, Liens or any restrictions placed on the title/property.
- Check the contract conditions
- Calculating and adjusting rates such as Water, Land Tax, Council Rates etc. The conveyancer checks that these are paid by the appropriate party prior to settlement.
In Australia there are three levels of government that include; federal, state and local. Specific conditions apply depending on which level of government is applicable. When talking about the sale and settlement of a property as above. To break it down a little further and clarify what a conveyancer will look into on your behalf in relation to the legal side of the process and commonly known as “searches” in the real estate industry. The most common searches include (but not limited to):
- Lands Title Search
- Council Property Search
- Mains Road/Widening Act Search
- Company Search
- EPA (Environmental Protection Agency) or Contaminated Land Search
- Land Tax
- Form R1 and Section 7
- Memorandum of Mortgage
- Strata or Community Particulars
- Any Lease or Tenancy Agreements
As you can see there is quite a lot at stake and much to know! If not prepared things can get out of hand. As I have mentioned previously there are do it yourself kits available, just be wary of what is at stake.
Settlement day has come and gone; money exchanged, mortgages discharged with new ones in place. Titles have been exchanged and you have taken possession of keys.. But the conveyancers job is not completely over.
Behind the scenes they are disbursing money from a trust account to the appropriate departments. For example; paying water bills, council rates (pro-rated) so that the new owners only pay from day of settlement. Also paying real estate agents, bank fees and all other parties that are owed money.
Post settlement day they consult and double check all records. Both public and private ensuring they are updated with relevant ownership details.
What happens if it’s not smooth sailing?
In my real estate career I have seen almost every scenario possible from a string of properties held up at settlement due to just one property, clients not agreeing on terms, terms not held up, building/pest inspection failures, finances not ready, buyers and sellers trying to pull out at the last minute to the unfortunate circumstances of one of the parties passing.
All which are delicate situations in their own right! Furthermore special consideration needs to be given and dealt with as each situation arises. As with my own personal example previously, a good conveyancer will negotiate between all parties to try and a) diffuse a situation b) negotiate new terms c) negotiate monetary compensation if needed. And in favour of the party they represent. It is for that reason that I would highly recommend the use of a conveyancer.
I’d also like to point out that an agent will often recommend using the same conveyancer as the vendor because it’s easier and typically can be quicker. But whilst using the same conveyancer as the other party involved can save you money, it’s for the unforeseen reasons above that I personally like using a separate conveyancer. Legally when a conflict of interest arises a separate conveyancer must be used…so why chance it?
So why use a conveyancer? If all the above sounds like fun and you want to save typically a couple of thousand dollars then by all means give it a go 😀
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