Buying a property is an exciting time, whether it’s for personal use or as an investment. There are many things to consider and co-ordinate, and a number of items that can go wrong if they’re not handled correctly from the start. It’s for this reason that it’s advisable that you surround yourself with people who specialise in property transactions to make the process as smooth and seamless as possible; this is where a conveyancer comes into play.
So, what exactly is conveyancing, and what will a conveyancer do for you?
In short, conveyancing can be defined as the legal process of transferring property from one person or entity to another. For a buyer, a conveyancer’s role is to:
- prepare, clarify and lodge legal documents including the contract of sale and memorandum of transfer
- undertake research on the property being purchased, including its certificate of title (this includes checking for easements, type of title and any other information that needs addressing)
- transfer the deposit money in a trust account
- calculate the adjustment of rates and taxes
- settle the property – act on your behalf, advise when the property is settled, contact your bank or financial institution when final payments are being made
- represent your interest with a vendor or their agent
From a legal standpoint, you are not required to use a conveyancer, however there are many reasons that it’s advisable to; these include saving both time and money, reducing unnecessary stress and enhanced peace of mind which is important when dealing with anything that carries legal ramifications. Very few people are versed in reading legal documents and the conveyancing process is relatively complex. There is a high risk of making errors, and these can be expensive to rectify.
Like with any professional relationship you’re entering into, it’s important that you’ve done some research; you need to feel comfortable with the person you’re hiring to execute this significant transaction. Choosing the wrong conveyancer could be as costly as is not choosing one at all. Consider asking some of the questions below to gain the knowledge you need.
How long have you been working as a conveyancer?
It’s true that we all have to start our careers somewhere, however hiring a conveyancer that’s obtained a fresh qualification and has started their own small business, is a lot different to hiring a relatively new starter who’s working alongside more experienced staff in a larger company or a solicitor’s office.
What are your fees, what services are offered within this, and am I likely to incur any hidden costs?
Make sure you ask for a full breakdown of what the fee actually includes, so you’re not surprised with unexpected costs at the end. Another way to avoid this is to find someone who provides a flat fee service. Think about it like an unlimited internet plan; you may pay slightly more upfront, but you know you won’t have excess usage charges at the end of the month. Don’t be surprised if there is a considerable variation in the fees quoted.
What happens if there is a conflict of interests?
It’s certainly not illegal for a buyer and seller to be represented by the same conveyancer, however it is rarely advisable. There are a range of things that can cause conflict in a property transaction, and for the money you’re paying, it’s safe to say that you’d prefer to know that your legal counsel is working solely with your best interests at heart. If they see a problem with cross representation, think about taking your business elsewhere.
Do you have Professional Indemnity Insurance?
We all enter into professional agreements with the best of intentions, but we can never foresee what lies ahead. Ensuring your conveyancer is covered by the appropriate insurance means that you’re protected against any claims that may arise if they are seen to be negligent in their professional duties at any point. If they are not covered by Professional Indemnity Insurance, it’s advisable to seek new representation.
Whether the property you’re buying is for personal use or for an investment, it makes no difference, you will need to pay the conveyancing fees in full; there is no tax offset for costs related to purchasing an investment property. Where this will come into play though is if you sell your investment property further down the track. The cost of conveyancing will add to what’s called the cost base of your property which is the purchase price minus stamp duty, then minus conveyancing fees. This is especially important when calculating capital gains tax as the amount you’re paying it on will be less.
If you don’t know where to start looking for a conveyancer, ask friends if they can recommend anyone, or approach your local real estate agent; they should have a good knowledge of professionals in the local area. It’s a significant transaction, and you deserve to know it’s being handled with competence.