What is conveyancing and how does it work?

Settlement is a complex undertaking and lot can go wrong if something is missed, which could cost you your entire deposit.

If you’re ready to take the next step towards purchasing the home there are a number of complex steps to take next before settlement can occur and the home is finally yours.

That’s where it’s important that you get the assistance of some qualified professionals that can assist in the purchase of what is most people’s most valuable asset.

While you can opt for DIY conveyancing this isn’t recommended unless you’re extremely knowledgeable and experienced in property law.

Legal professionals in the field also have indemnity insurance coverage which could save you if something goes wrong in the settlement process.

Given the complexity of the legal work, it’s recommended that you hire a professional to conduct your conveyancing.

What is conveyancing

Conveyancing is the process of transferring ownership of a legal title of land to the new owner, whether it be a from a person or entity.

Conveyancing generally consists of three stages:

• pre-contract
• pre-completion
• post-completion

What is a conveyancer?

A conveyancer is a licensed professional, sometimes a solicitor but not always, who specialises in providing advice and information about the sale of a property.

What is the difference between a conveyancer and a solicitor?

Conveyancers are licensed professionals who are qualified to help you with all the legal processes and documents involved in buying and selling a house.

Solicitors are lawyers, who can legally perform all the tasks a conveyancer does but also have a broader knowledge of the legal system.

Solicitors who specialise in conveyancing will sometimes refer to themselves as a conveyancing solicitor.

How conveyancing assists buyers

For the buyer, a conveyancer will:

• Prepare, clarify and lodge legal documents – e.g. contract of sale and memorandum of transfer
• Research the property and its certificate of title – check for easements, type of title and any other information that needs addressing
• Put 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

How conveyancing assists sellers

For the seller, a conveyancer will:

• Complete legal documents including putting together the Contract of Sale
• Represent you in dealings with the buyer – e.g. request to extend dates, ask title questions etc.

How much does a conveyancer cost?

For the majority of single dwellings the cost for conveyancing is between $800-2500 but costs increase with the complexity of the sale and whether you’ve hired a conveyancer or solicitor.

If the sale isn’t straightforward then it might be prudent to hire a licensed solicitor instead of a conveyancer to undertake the process.

When should you consider hiring a conveyancer or conveyancing solicitor?

It’s recommended that you engage a conveyancer whenever you are:

• buying or selling a property
• subdividing land
• updating a title (i.e. registering a death)
• registering, changing or removing an easement

How do I find a conveyancer?

Just as you would interview prospective real estate agents, you should sit down and talk to multiple conveyancers before selecting one to oversee your settlement process.

A good place to start is by asking your friends and family if they can recommend a good conveyancer. If nothing comes from this, do some online research and ask for recommendations from your real estate agent, mortgage broker, accountant and lawyer.

Once you have a list of prospective conveyancers, give them a call and ask a few questions (see below) to find one that meets your needs for the price you’re willing to pay. Some conveyancers specialise in different types of real estate, which should help narrow your search.

Questions to ask potential conveyancers:

• Are you a member of the Australian Institute of Conveyancers?
• What types of property do you specialise in?
• How much will it cost?
• What will I have to pay at settlement?
• What other costs are there?
• How will you communicate with me and how often?
• How long will everything take on settlement day? (This is important if you are buying and selling at the same time)

Can I claim conveyancing fees on my tax return?

Unfortunately conveyancing fees cannot be claimed on your tax return in Australia. The ATO considers any fees incurred as part of the buying process, including conveyancing fees and stamp duty, a “capital cost” and are not deductible.

Find out about what you can and can’t claim on tax for investment properties.