The short version
- A conveyancer checks the contract, runs searches, and manages settlement with your lender and the seller's side.
- Engage one before you sign a contract, so they can spot problems while you can still negotiate.
- Most delays come from late documents, finance and valuations.
If you are buying/selling a property, you're more than likely to hire a conveyancer. If you're unsure of their role, then this article is for you. Find out what their responsibilities are and why they're a better option than going the DIY route.
What is a conveyancer?
A conveyancer is a licensed professional who guides you through the property transfer process when buying or selling a house.
It is also worth mentioning that conveyancers and solicitors are different. Conveyancers specialise in property conveyancing work, while solicitors are qualified legal professionals who can also provide advice on broader legal matters.
What conveyancers do
Conveyancers make sure that:
- the buyer or seller follows the legal steps throughout the process;
- any easements, covenants or caveats are notified;
- council and water rates prepaid or owing are adjusted;
- you are represented at the settlement;
- the property title is transferred correctly.
As a prospective purchaser, you may also ask a conveyancer to help in the process of negotiating a sale price, rather than speaking to the vendor or their agent yourself.
Can you buy a house without a conveyancer?
Hiring a conveyancer is not a legal requirement. However, the laws governing property transfer are complicated and fraught with paperwork. Some incorrect details could result in your contract being voided. And because most sales now settle electronically, through platforms like PEXA that only lawyers, conveyancers and lenders can use, buying without one is impractical if you have a home loan.
How to avoid delays and problems with conveyancing
Delays in the conveyancing process are widespread. If you know some of the common culprits, you can hopefully avoid them. Let's take a look at five common reasons for the delay.
Not communicating with a conveyancer early enough
If you make an offer on a property, it is essential to put your real estate agent in touch with your chosen conveyancer as soon as possible. To avoid any delays, you could choose a conveyancing firm to work with while you are house hunting.
Not signing legal documents promptly
Much of the legal documentation will need to be signed by both the buyer and seller. They will often need witnesses to be present during the signing.
Try to make yourself available to sign any documents and be clear about your availability. Sometimes, other parties delay the process, and this is out of your control.
The legal documentation required could have some errors that further delay the process. Ensure that details such as the correct legal names of persons or entities are documented on the contract of sale.
Sometimes the surname and first name are in reverse order. This is the name used on the mortgage documents, and errors on these documents are cause for resubmission. This brings us to the next point.
Errors on the mortgage application forms
Any incorrect information on a home loan application can either delay the process or nullify that application, thus delaying settlement. Be upfront and honest about your financial background and current income. To be on the safe side, always double-check all of the information before submitting it.
Valuations
Issues arise when the formal property valuation and contract purchase price are significantly different. Sometimes the buyer may need to pay more than the amount for which the property is officially valued, meaning that their deposit percentage drops.
This could result in a requirement for the buyer to find additional funds, or a delay in mortgage approval, or the need for lenders mortgage insurance.
If you know what you would do in this hypothetical situation, this preparedness can prevent the delay.
Final inspections
Sometimes the buyer might find some issues with the property during the final inspection. This can include anything from electrical wiring to pipe leaks or wall cracks.
Sometimes the buyer will want this issue to be fixed before settlement. This delay is based on how long it takes the seller to rectify the problems.
To prevent any unnecessary delays, it is important to have a real estate team you can rely on. Make sure that your mortgage broker, real estate agent and conveyancer are prompt with email replies, and submit your documentation ASAP.
Keep in mind that you need to try and foster a good relationship with the seller. If they have a legitimate reason to delay settlement, it may benefit you to be lenient with them. You could come to an agreed solution, such as rental occupancy prior to settlement.
If you, in turn, need an extension for whatever reason, the buyer is more likely to be understanding in response. You need to discuss this with your conveyancer, as they can advise you on your specific issues.
Conveyancing in each state
Although each state handles conveyancing in a similar fashion, there are a few key differences between them. Some of these include the laws around conveyancing and contractual conditions.
For example, in NSW, buyers/sellers can use either a solicitor or licensed conveyancer. However, in Queensland, the transfer can only be completed by a Queensland registered solicitor.
Conveyancing fees may vary significantly between states. This can be a major factor of concern since there are already so many costs associated with buying a property.
Some firms will charge by the hour while others have a flat rate. Many of the conveyancers will also base their fees on how complicated the task is or on the property price in question.
Conveyancing laws also differ between the states when settlement is delayed. Whether you are the buyer or the seller, it is important to know your rights when settlement is delayed.
For instance, in Victoria, the purchaser may incur penalty interest if they delay settlement, but the vendor does not need to pay any penalty if they are the ones causing the delay. In this case the vendor may allow the buyer to occupy the property early.