You’ve got your sights set on your dream property and you’ve planned out your budget; but have you factored in conveyancing fees?
Conveyancers guide you through the legalities of buying or selling, safeguarding your property transfer.
To know how much you really have to spend on your new property, it’s important to understand all the costs involved in the conveyancing process and build them into your overall budget.
So, how much does conveyancing cost, and does it vary by state? Here we explain everything you need to know about the conveyancing process:
What is Conveyancing?
Conveyancing oversees the legal processes involved in transferring property to a new owner.
The process ensures that the buyer acquires a valid title to the property and that the transfer of ownership is legally binding.
Mistakes or omissions in the legal process of transferring property can have severe financial consequences; conveyancers help you to understand the legalities and act on your behalf to transfer funds, titles and information to the other party.
What Do Conveyancers Do and Why are They Required During the Home Buying Journey?
Conveyance services help you navigate the financial and administrative duties of transferring the ownership of the property and land title, which could include to:
- Prepare, clarify and lodge legal documents including the contract of sale
- Research the property and its title
- Act on your behalf to settle the property, coordinating payments with your lender or bank. Even when using Pexa it is wise to have a conveyancer as regulations can change state to state.
- Communicate with the legal representative of the other party as your representative, verifying the terms of their contract
- Send final documents confirming the property is now in your name and notify council of new ownership
While you are not legally required to hire a conveyancer, having this qualified, knowledgeable person acting on your behalf can help you avoid legal pitfalls (and significant financial consequences, which could include losing the property and forfeiting a portion of your deposit!)
You can – technically – perform your own conveyancing service if you have a thorough understanding of and experience in property law. Professional conveyancers are required to have insurances that could cover you in the event of problems during the settlement process due to negligence.
How Much Does Conveyancing Cost?
A conveyancing fee can vary greatly depending on the tasks involved. On average, you can expect conveyancing fees to come in somewhere between $1000-$2000.
You may negotiate a fixed fee service for all or certain conveyancing activities (e.g. title search, preparing a sale contract, etc.) or your fee may be a percentage of the total property sale or purchase price.
You are entitled to know how much conveyancing costs upfront; this is one of the most important questions to ask a prospective conveyancer – more on this below. If a conveyancer can’t provide upfront costs for some reason (your situation is unusual or has particular requirements), they must detail how they will calculate their fees.
Note: Conveyancing costs are just one of the additional fees associated in selling or buying a home; you also need to factor in marketing costs if you’re selling, and the real estate agent’s commission.
Can Costs Differ by State?
The legal process of selling and buying property in Australia varies between states and territories, meaning different tasks may be required of conveyancers. For this reason, and because there are differences in property value and the required expertise of conveyancers, professional fees for conveyancers also differ between states.
Typical conveyancing fees for Victoria sit around $600- $1500 while conveyancing fees in NSW are usually higher, averaging between $1000 – $2500.
Disbursements fees – separate to conveyancing fees – also tend to vary by state.
Disbursement fees cover activities that the conveyancer has had to outsource as they fall outside of the scope of their practice. This fee may include pest and building investigations, expenses incurred to search for the land title or legal documents amongst other services.
Can A Solicitor Do Your Conveyancing?
A solicitor is the broader term for a lawyer and yes, they can perform your conveyancing. A conveyancer or ‘conveyancing solicitor’ has a more specific knowledge base of the processes involved in buying and transferring property.
A solicitor can act in all areas of law and is not limited to property-related transactions. A solicitor’s fee will usually be higher than the cost of a conveyancer.
Specialised conveyancing services are generally used for property transactions, though if your transfer is particularly complex, you may need a licensed solicitor.
When is Conveyancing Required During the Sales Process?
It is highly recommended to seek out a conveyancer before signing contracts.
While hiring a conveyancer is not a legal requirement, they will guide you through the process of buying a property and understanding your contract. Many contracts will have terms added over and above the standard contract, your conveyancer will ensure you are completely informed as to what you are agreeing to when signing a contract of sale, freeing you up to focus on other things (like moving house!)
Qualified conveyancers will have professional indemnity insurance cover in case of negligent services or advice.
It is recommended to engage a conveyancer when you are:
- Buying or selling property
- Subdividing land
- Updating a title
- Registering, changing or moving an easement
Recommended Questions to Ask Your Conveyancer
Some helpful questions to ask a conveyancer could include:
- What is the cost of conveyancing services or how do you calculate your costs?
- What disbursements costs can I expect to pay?
- What information do you need from me?
- What information does the buyer/seller need to provide?
- How long does the settlement period last?
- At what stages will you invoice me?
- How long will it take for funds to settle in my account?
- When will I receive the keys and official title to the property?
- Are you a member of the Australian Institute of Conveyancers AIC?
Summary
Navigating the legal requirements of a property transaction can be overwhelming without the proper support. Conveyancers help you understand the jargon and get all of your paperwork in order for a smooth and legal transfer of title.
Conveyancing costs vary depending on the complexity of the property transfer and where you live. Most agree that the cost of a conveyancer is worth the security of transfer of titles and funds. For more information on the process of buying your property, get in touch with the team at Homestar Finance.
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