Buying a property can be a stressful experience, not only for first time buyers but also for seasoned buyers and sellers. When moving or investing in residential or commercial property the many steps involved in the process can be overwhelming particularly in major cities like Melbourne, Victoria.
During the different stages in a purchase transaction, buyers may be required to complete tasks urgently. This is due to actual imminent tasks as well as those which are ‘hyped-up’. For example, selling agents can create a sense of urgency by pushing you to sign a contract of sale quickly to avoid a deal falling through if you don’t speed things up.
A conveyancer or property lawyer is engaged to help their clients complete their purchase or sale transaction and to avoid certain pitfalls. For this reason, it is recommended for buyers and sellers to avoid scrimping on costs when completing their conveyancing. On this page we will help you understand the benefits of choosing a well-costed conveyancing solution and how that facilitates a successful real estate deal. You will also learn more about how conveyancing costs are calculated and what they include.
Why Is Conveyancing So Important?
Each real estate transaction is unique and is never the same as the other. Contracts and ancillary documents are drawn up based on the individual property and there is no such thing as a default contract that can be reused every time.
The contract of sale is prepared by the seller’s conveyancer or lawyer and usually provided to the buyer through the real estate agent. The buyer should fully understand what is in the contract, to avoid entering into a transaction containing overly onerous conditions that is to their detriment.
A conveyancer acting for a buyer should be appointed early on to review the wording of the contract and all the contract’s enclosed documents. Certain clauses can be negotiated to be amended or deleted altogether to ensure a seamless and stress-free settlement.
Equally important is the due diligence process itself. This includes verifying that the title is in order, there are no outstanding infringements or notices and all property rates and taxes are paid up-to-date.
In some situations, there may also be third parties with a legal interest in the property. The presence of interested third parties can cause serious delays and even make a transfer impossible. Carrying out further searches to check for interested third parties are critical in avoiding a last-minute ‘road block’.
What Are The Risks Of Not Getting It Right?
In Australia, you are not required by law to hire a conveyancer to represent you in your property transaction. It is possible to do all the conveyancing work, including searches, yourself. Having said this, it is a stressful and complicated process to handle yourself. Conveyancers require at least 2 years of education and training before they can represent clients in a property transaction. Conveyancing is a specialised area where the right training and experience will help you avoid monetary loss and complicated legal disputes. If a property transaction runs the risk of ending up in jeopardy then this will likely lead to additional cost and delay to you.
A problematic settlement can sometimes lead to far worse outcomes. For example, a failure to ensure a seller is not in arrears can lead to a buyer inheriting many years’ worth of unpaid land tax or property rates. The debt remains and will be charged to the buyer as the new owner of the property.
A failure by a buyer to have their contract properly reviewed can lead to unintended delay or acceptance of issues pre-existing on the property. For example, there may be a failure by the owner to comply with a building notice to fix a structural wall. Failure to detect this together with special clauses for the seller to avoid liability will lead to significant financial loss to the buyer.
What Do Your Conveyancing Costs Include?
We have briefly mentioned some items that your conveyancing lawyer will be responsible for. These include checking if the contract of sale is in order and conducting the necessary searches on the property.
The conveyancing fee will depend on a variety of factors. These include known factors and unknown factors. For example, a trustee in bankruptcy selling a property on behalf of a bankrupt person is more complex and time consuming and will lead to higher fees.
You can find our online calculator on this page. It will give you a good estimate on what your fees will look like.
The second part of the fee structure is made up of costs for disbursements. At Provey, our quoted fee includes some agreed disbursements, meaning that in most cases your quoted amount will be the fee paid by you on finalisation of your matter.
What Are Disbursements?
By and large these disbursements are fees incurred for certificates and searches relevant to a transaction. If the conveyancing was completed by a self-acting party, they are mandatory to avoid unexpected issues affecting the property.
Disbursements include the following (non-exhaustive list):
- Local council rates certificates;
- Land tax clearance certificates;
- Searches with the environmental protection agency;
- Building permit certificates;
- Encumbrance searches;
- Water rates certificates.
Once you have had an initial discussion with one of our conveyancers or property lawyers you will have a full understanding of the expected costs and fees. Call us today to find out more about our low cost and premium solutions.