THE INS AND OUTS OF BUYING A RESIDENTIAL PROPERTY

So, you are thinking of buying or selling a property and you are asked  ‘Who is your conveyancer?’.

You have made the decision to buy or sell your home, or even to sell and then buy a new home? This might be the first time you will hear the word ‘conveyancer’ or realise that you will need to engage one.  Actually, your best advice is to have met with and decided on your conveyancer already.

Generally, most conveyancers should be happy to have a no obligation conversation with you first, and offer you a guide to fees.

Some people will recommend one they have used; agents will often have one that they will recommend. You may get told that ‘all’ a conveyancer does is fill out forms and that it is an easy job created by the government to generate more turnover in the economy, or you might hear that it is a pointless position altogether. Perhaps this is because conveyancers work so hard behind the scenes to make your sale or purchase seem ‘easy’ and seamless – it is not a glamourous job and often not straightforward, but it is, however, incredibly important.

Once you have signed the contract there may be some questions such as ‘What happens to the deposit?’, ‘Are there any easements, encumbrances or caveats?’, and ‘What will happen with the power? And what about water? What happens if finance is not approved?’.

The banks are extremely busy and currently at the time of writing (April 2021) even busier, so make sure you allow sufficient time in your settlement for finance approval. At the moment that would be at least 3-4 weeks. Who will chase them and keep you informed? Who will work with you to make sure it is all happening? That’s correct – your conveyancer!

 

THE PROCESS

Think about how long this process has taken you. Weeks, months, maybe even years, and let’s be realistic, it was a lot of hard work and stress! An experienced conveyancer will know how much it has taken you to get to this point – point of interest, people often look at up to 80 properties before finding the one!

It is a well-known fact that the two most stressful things in life are getting married and buying a house!

89 per cent of people wished they were more clued up about stamp duty charges and the hidden costs of buying a house – your conveyancer will advise you of all this so that you have a realistic idea of what you will have to pay and why. There is a lot more to purchasing or selling a property than simply money!

Once you have decided on the place you like then there is the negotiating on price, which is easy for some and not so easy for others. Then there is that little thought in your head which asks – is this the right decision?

 

FOREIGN NON-RESIDENTS

Non-resident foreign purchasers generally need to apply for (and receive) approval from the Foreign Investment Review Board (FIRB) before purchasing residential property in Australia. Foreign residents are also liable for further stamp duty charges at settlement.

The whole process causes a lot of stress, right? And you still do not even own the place – at best you have signed a contract.

 

FEES

Then there is the fee structure, which can vary a lot here in Adelaide. There are conveyancers out there who will do your transaction for a fraction of the cost of what others will. This can be a bit like ordering a meal overseas – you see the price for lunch advertised on the blackboard and think ‘Wow! That’s a good deal’ then you sit down and eat your meal, and after completing your meal you ask for the bill where to your surprise you end up paying a lot more than you first thought. You also had to pay for the table water, the bread provided, the service tax, oh, and because you are in a fancy city, there’s a levy too. So, your initial thought of a good deal turned out to be no cheaper than any other restaurant, but what is worse is that you had expectations of receiving a good deal and you were denied that.

Well, the same thing goes with conveyancing. If you are told you are getting looked after for a cheap fee and that you don’t have to worry about a thing, the chances are that this is not the case! Like anything, quality comes at a cost and for conveyancing, quality comes in the form of putting the client first.

Many firms offer ‘fixed price’ conveyancing. Be sure to read the fine print as to what the offer entails. Generally, conveyancing costs comprise a professional fee (which is for the work undertaken by the firm) as well as expenses (which will generally cover searches, agent’s costs etc.), and GST. Some firms will charge additional for postage, photocopying and other incidental costs, or will charge a ‘service fee’ for searches on top of the fees charged by the actual service provider.

Finding a reliable registered conveyancer is one of the most important components in the successful settlement of the sale or purchase of a property. Conveyancing is something that most people do not readily understand, so it is important to use a good conveyancer who will guide you through the process. They will pay close attention to detail and ensure that the transaction occurs as quickly as possible.

A good conveyancer will be an asset to you, and will not only hasten the transaction process, but will also work to ensure that the deal does not collapse and ideally will minimise stress and anxiety throughout the process.

WHAT IS YOUR CONVEYANCER DOING FOR YOU?

Here is a list of what your conveyancer should be doing for you and if they are not it’s probably worth asking them why!

Your conveyancer will be:

  • Preparing the many legal documents required to change ownership of the property.
  • Arranging for the signing and lodgement of these legal documents and attending to the payment of stamp duty and the applicable registration fees.
  • Reviewing the contract and Form 1 (Vendor’s Disclosure Statement) and explaining to you in simple terms what the terms and conditions mean.
  • Checking the contract to see if there are any GST implications that may affect you (e.g., is the Vendor liable for GST?).
  • Assisting you with meeting any legal obligations that are required under the contract.
  • Explaining the importance of each step to help you understand exactly what is involved.
  • Discussing your obligations in relation to insurance.
  • Explaining how you as a Purchaser are at risk in regard to any mechanical breakdowns after signing of a contract.
  • Searching the title of the property – one of the most important elements of conveyancing.  Whether buying or selling, you should be aware of anything affecting the property, such as proposals by government departments, easements, encumbrances, illegal buildings, outstanding rates and taxes, and how they may affect you as the purchaser.
  • Calculating the adjustments of rates and taxes and preparing the settlement statement.
  • Liaising with mortgagees, agents, and financiers.
  • Creating and liaising with other parties in the electronic settlement workspace.
  • Notifying the appropriate government departments of the change of ownership.
  • Arranging financial disbursements such as water and council rates.
  • The best bit of all- informing you when your new property or sold property has settled.

Upon settlement, your conveyancer will contact you and/or your real estate agent to confirm settlement and allows for the keys to be handed over. This is important because it is the final step in the process of buying or selling a property.