Why a Conveyancer Will Make a Big Difference in the Sale of Your Property
There is no denying the excitement that comes with buying your first, second or even your third home. But not long into the process, you will need to have someone to represent you on the legal side of things.
And that is where a qualified conveyancer or solicitor comes into it.
Buying and selling property and understanding conveyancer fees and costs in Australia can be difficult.
A professional conveyancer or lawyer does it on a daily basis and knows the pitfalls that come with the territory. They can help you navigate through the laws and legislation to ensure a fast transaction.
What is Conveyancing?
Conveyancing covers the legal and statutory process of transferring real estate ownership from one person to another. It applies to all three stages of the buying and selling process (before the contract, before completion, after completion) and involves the preparation, execution and lodgement of various legal documents to enable a swift and legal sale.
Conveyancing is carried out by a licensed professional such as a conveyancer or a lawyer. It is their job to provide advice and information before the sale, to ready the documentation and conduct the settlement process.
A conveyancer or solicitor will work on your behalf and advise you on any issues which could affect the sale of the property such as illegal buildings or government proposals.
What Does A Conveyancer Do?
Both the buyer and seller of a property need to employ their own conveyancer to represent their side of the legal process.
From the Buyer’s Perspective
From a buyer’s perspective, a conveyancer will:
Prepare and lodge all legal documents including the contract of sale, notice of acquisition, and the memorandum of transfer
The conveyancer will review the sale contract and communicate its terms to the purchaser.
Attention will be given to:
- zoning laws
- settlement dates
- special conditions
- title matters
- utility connections
Once the transfer of land is drawn up, the purchaser will sign the document. It will then be forwarded to the seller’s representative at least ten days before the settlement date.
Lodge a caveat with the land authority
The caveat protects the buyer’s interests. While technically you become the legal owner once the settlement occurs, between the time you sign the contract and the settlement date, you are not the legal owner. A caveat with your name on the title secures your interest in the property and confirms that the property is yours once the settlement is complete.
Research the property and check the certificate of title
Certificates may be needed particularly if the Vendor’s Statement contains inadequate information. The statement (also referred to as a Section 32) needs to be sent to the vendor before settlement. A cross reference of information from the seller may also be necessary.
Search government departments and local authorities and calculate adjustments to rates and taxes
A conveyancer will supply a costs disclosure statement for standard conveyancing procedures and disbursements including all government and authority searches as well as stamp duty fees.
The general rule for a property is that the debt stays with the land. If the rates are not divided between the purchaser and the seller, then the buyer will be left with the sum in its entirety.
Act on your behalf and attend at settlement
The lawyer will represent the buyer and liaise with the financier and seller. The signed documents (sale contract, the transfer of land documentation and the title search) will be supplied to the banker. Your legal representative will make sure that the bank is ready to settle in time and has the loan money available by the settlement date.
A good conveyancer will keep you informed every step of the way.
Negotiate with the vendor’s representative regarding contract changes and general legal advice
It is worth noting that these two services may incur additional charges
From the Seller’s Perspective
From a property vendor’s point of view, a conveyancer will:
- Prepare all legal documents such as the Vendor’s Statement
- Respond to buyer requests
- Liaise with your lender if the property has a mortgage
You may want to locate a conveyancer before you get to the signing of the contract stage as the conveyancer information will need to be present on the purchasing and selling contracts.
Like real estate agents, not all conveyancers or solicitors are created equally. Therefore, you will need to make an appointment to visit them and confirm they have your best interests at heart.
How Do I Choose A Conveyancer?
You will need to meet with a conveyancer before the sale and establish whether they are up the task.
Here are some questions to ask a conveyancer:
- What is the maximum I will pay in conveyancing fees and charges?
- What are your conveyancing costs and what is included?
- Are there any government fees to pay?
- How long will settlement take?
- What type of property do you specialise in?
- What will additional services cost?
- How will we keep in touch?
- Are you a member of the Australian Institute of Conveyancers (AIC)?
How Much Does a Conveyancer Cost?
There are no particular conveyancer fees for hiring a solicitor to represent a property purchase, and it will depend on the set of circumstances about the property in question. Like real estate commission fees, a conveyancer’s fee will vary substantially and needs to be negotiated at the outset.
A solicitor will charge a higher fee than that of a licensed conveyancer.
The lowest price is not always the best.
Conveyancer fees will take into account their experience, location, reputation and the all-important peace of mind that the sale will go through swiftly and smoothly.
It is also necessary to understand any and all the conveyancer costs that will be incurred throughout the process to avoid any surprises.
A conveyancer or lawyer will not only charge for their service but also the cost of disbursements, i.e., costs incurred by a professional on your behalf. These payments will vary and may include:
- Title searches
- Drainage diagrams
- Planning searches
- Council searches and certificates
- Water rate searches
- Electricity rate searches
- Roads and land tax searches
- Building certificates
- Settlement fee
- Land tax clearance certificate
- Postage, stationery, and other administrative costs
Can I Undertake the Conveyancing Process Myself?
From a legal perspective you don’t need a specialist to represent you during the purchase or the sale, however, it is recommended that you engage one for the property process.
A conveyancer will charge anywhere between $500 and $1,500. This may sound like a lot of money, but with that payment comes a lot of support and experience.
There is no need to muddle through the terminology and procedures, and as you are legally bound to file paperwork, one misstep could cost you a lot more money in the long term.
If the sale is anticipated to be complicated, then it might be in your best interest to seek a lawyer. Think about whether there are special conditions included that might make it a more difficult transaction. Council complications or property restrictions may be an issue.
Bear in mind that the conveyancing process also includes a property or title search. If you do not have access to this information, then you will need to contact each regulator to understand planning restrictions, council rates, zoning regulations and road access.
The choice to hire a professional conveyancer will depend on your budget, experience and the amount of time you have on your hands.
Conveyancing: A State By State Breakdown
Conveyancing is regulated by state laws, and the process differs for each state or territory. Fees such as stamp duty and transfer fees also vary by state. However, these are only payable by the buyer. Sellers may have to pay Capital Gains Tax depending on whether it is an investment property.
Let’s look at it from a state by state perspective:
New South Wales (Sydney and surrounds)
The first stage in the conveyancing process in NSW is to prepare The Contract for Sale of Land (2005 Edition). This is prepared by the seller’s solicitor or conveyancer, ready for an offer to be made.
The deposit is usually around 10% of the purchase price less the initial holding deposit.
In New South Wales, the cooling off period is five business days from exchange unless waived by the purchaser. It is not automatically applied. It requires the consent of both the seller and buyer for it to be applicable. The purchaser who cancels the contract of sale then forfeits 0.25% of the purchase price.
In NSW, the time for completion of the sale is around six weeks.
Victoria (Melbourne and surrounds)
The Form 1 Contract Note or the Form 2 Contract for Sale of Real Estate will need to be prepared. In Victoria, the deposit is normally around 10% of the purchase price with Lender’s Mortgage Insurance or 20% without the Lender’s Mortgage Insurance.
The cooling off period is three business days from the exchange where no waiver is allowed.
Queensland (Brisbane and surrounds)
When selling property in Queensland, there are some relevant points to be aware of.
Firstly, the Real Estate Institute of Queensland Contract for Houses and Residential Land, and Real Estate Institute of Queensland Contract for Residential Lots in a Community Title Scheme will need to be completed. The seller’s real estate agent is responsible for the preparation of the contracts.
The purchaser’s deposit is usually around 10% of the purchase price less the initial holding deposit.
The cooling off period is five business days from exchange unless waived by the purchaser who has received PAMDA Form 32a from a lawyer. It will only commence if the seller complies with PAMDA. If revoked, the buyer forfeits 0.25% of the purchase price.
The purchaser’s solicitor or conveyancer is responsible for preparing the transfer document and paying any stamp duty to register the document. They will also ensure that the transfer is sent to the seller’s lawyer or conveyancer for the seller to sign.
In Queensland, the time for completion is usually 30 days unless otherwise specified.
Tasmania (Hobart and surrounds)
When it comes to selling your property in Tasmania, you will first need to have your solicitor or conveyancer prepare The Contract for Sale of Real Estate.
After the price has been agreed upon, the purchaser will pay a deposit of around 10% of the purchase price.
In Tasmania, the seller and purchaser each sign one copy of the contract. After the contracts have been exchanged, a Priority Notice is lodged by the buyer, which reserves their right to have the property transferred to them after settlement, up to a period of 60 days.
In Tasmania, the time for completion is usually 30 days. But this could lengthen if the purchaser is buying off the plan, as time is required for finishing the construction and obtaining the necessary permits.
South Australia (Adelaide and surrounds)
It is the job of the seller’s solicitor or conveyancer to prepare the necessary contracts.
The deposit is usually around 10% of the sale price while for larger properties, the deposit is usually less than 10% of the sale price.
The seller must provide a Form 1 Seller’s Statement to the purchaser at least ten days before the settlement (unless sold at auction where the number of days is reduced to two).
In South Australia, the cooling off period is two business days, unless it is waived by the purchaser. It does not start until the buyer gets served the Form 1 Seller’s Statement or exchange. If the sale is cancelled, the seller will refund any purchase deposit over $100 in full.
The time for completion varies from state to state unless it is set by agreement between the seller and buyer, but in SA the time for completion is usually 30 days.
WA (Perth and Surrounds)
The seller will need to have a Contract for Sale of Land by Offer and Acceptance, and Joint Form of General Conditions for the Sale of Land prepared by their solicitor, conveyancer or real estate agent.
The deposit is about 5% of the agreed upon sale price of the property. There is no cooling off period in Western Australia.
WA has an average time for completion of 4 to 6 weeks, although this is longer if the property is still under construction.
Frequently Asked Questions (FAQs)
Where Do I Find a Conveyancer?
Licensed conveyancers for NSW, Victoria, South Australia, WA, NT, and Tasmania can be located by visiting the Australian Institute of Conveyancers in your particular state. Property buyers in the ACT or Queensland should reach out to the ACT Law Society or the Queensland Law Society respectively.
Qualified solicitors can be sourced through your state or territory law society.
Referrals are often the best way to locate a professional conveyancer to sell your property. Don’t be afraid to ask for personal recommendations from friends or family.
Do all property purchasers get a cooling off period?
A cooling off period refers to the number of business days (Monday-Friday) where a purchase can walk away from an agreement to buy a property. If you, as the seller, purchase a property at auction, there is no cooling off period. Therefore it is wise to have a conveyancer arranged at the ready. Both the seller and the buyer are legally bound to sign the contract.
A private sale will incorporate a cooling off period; although in some states, a buyer can waive their cooling off rights. Each Australian state and territory has varying rules regarding the length of the cooling off period and the deposit required to secure the property.
In NSW, Queensland and the ACT, the cooling off period stands at five days. NT offers four business days, Victoria three and SA two. WA and Tasmania have no specified cooling off period.
During the cooling off period, it is critical that a conveyancing representative is sought if that has not already been arranged.
There is no cooling off period for the seller. Once the seller has signed, there is no backing out of the contract.
When does the property stamp duty need to be paid?
The stamp duty is due on the finalisation of the contract for sale and must be settled within three months, or before settlement when a mortgage is involved. If the purchase includes a house and land package, then the stamp duty is due within the first twelve months or before settlement if a loan is required.
Do I need to take out building insurance?
Building insurance is highly recommended to be in place before settlement. If you are applying for a mortgage, then your financier will require a building insurance policy before they will offer you a loan. As your insurable risk starts on the day of settlement, it is essential that the insurance policy is in place before that date. Your lender may require you to have insurance a couple of weeks before the actual settlement date.
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