Property Conveyancing

What is property conveyancing and do we need it? There is no legal requirement to have a conveyancer however as we are not legal experts it is always a good idea to employ one to protect your interests. Many a time I have worked with buyers over a fair period of time and when they do find their “dream home” they do not have a legal representative .They scramble for one and even ask the real estate agent to suggest a conveyancer. Let’s understand what the function of a conveyancer is. Are they solicitors? Do they need to be solicitors?

A conveyancer does not need to be a solicitor, although many solicitors also do conveyancing and that is why many people get confused. There are several courses for conveyancers and simply put, they specialise in “transfer ownership of a legal title from one owner to the other”. Since there are many thigns that can go wrong with ownership of title and mistakes when it comes to property can be extremely costly, it is important to have a specialist make sure your title is secure.

A conveyancer’s role is broadly divided into 3 stages:

1. Before the contract is signed wherein they do their due diligence
2. After the contract is signed and before completion
3. Finally assist to complete settlement. 

The legal phrase ‘caveat emptor’ means ‘buyer beware’  and rings true particularly in real estate transactions. It means that once the transaction is complete, the buyer will often not have much recourse to address defects in the property and its title that they were not previously aware of. Accordingly, it is important to have a conveyancer or solicitor thoroughly examine the records for any defects in title.

Before signing a contract and putting any money into the transaction a buyer needs to have the contract of sale whetted by a conveyancer or solicitor. They would look for easements, special conditions like “release of deposit”, negative easements on the title and anything that could affect price or resale or getting a loan from the bank. If there are any clauses that could adversely affect the buyer they are negotiated. On signing the contract the conveyancer or solicitor would then prepare, clarify and lodge legal documents. Calculate the adjustments of rates and taxes like land tax etc.

When it comes time to settle the property, they will act on your behalf and co-ordinate with your financial institution for payment of your property. They will represent your interest with your agent or vendor.

For a seller, a conveyancer would prepare a contract of sale .She/he would order the S149 certificate or the zoning certificate, title deed, sewage diagram, deposited plan and include special conditions to safeguard your interest. They would then represent and respond and negotiate with the purchaser’s solicitor and act in your interest.

For any service including legal services there are some excellent providers and some you would rather not work with. You need to choose a conveyancer with whom you’re most comfortable. Get a referral from a friend or even your real estate agent. They do work with conveyancers all the time and are aware of the best one, the worst ones and the ones that provide you value for money. When it comes to costs, there are a variety of fee structures. These include:

1. Fixed Fee
2. Fixed Fee plus disbursements
3. Fixed fee plus disbursements and an hourly rate for some additional work.

Each has their own benefits and pitfalls and depending on your needs for certainty of costs, you can negotiate a fee structure with your conveyancer/solicitor. Besides that you can even ask your conveyancer how often you would be updated. This is particularly relevant on settlement date when would you be informed of the “time of settlement” as this could be critical if you were a buyer and needed to move in and plan or if you were a seller and needed to know when the house would have to vacated.

In Cherrybrook there are quite a few conveyancers and solicitors .Some are at the cutting edge and are even offering electronic settlements whilst others seem still to be in yester year with age old methodologies. Some are extremely responsive and spend the time to discuss and understand your requirements, others not so much. Choose wisely.

Bursting the Bubble

With concerns over a bubble being formed in the NSW and Vic markets AAPRA and the RBA have made every effort to take the steam out of rising prices. Some of the initiatives they have taken are

Media releases

There has been a spate of media releases indicating the market is “over heated” .There have been nuances with  a  broad hint with releases like” prices do not keep going up”, “interest rates would rise someday” , “ this is probably last interest rate cut”. The media have added to the woes by stating that real estate in Sydney and Victoria has become unaffordable.

Interest rates and investors

The new initiative to wean out the investor is have a dual interest rate regime. Investors have to pay a larger rate of interest than home occupiers. They also indicated that “negative gearing” may have to be reexamined. Capital gains tax would have to be reexamined. This has caused shivers down investor spines and finally they have even threatened to change laws around super.  

The effect it has had so far have been minimal as prices in both Sydney and Melbourne seem to be holding on to their prices but one needs to know for how long. Prices do not seem to be going up at the same pace. Stock levels have come on as it most people that there are more chances for a move on the down side as compared to the upside. Buyers have become more cautious .Volumes of people through open homes seems to have dropped in numbers and so have offers on the table though the underlying move is still upwards. So all the efforts described above has managed to take out some steam from the market though the trend is still upwards. This becomes evident when one examines Real estate price indicators.

Auction Clearance rates

Sydney:  from 81% it has turned to 77-79% in the last two months

Melbourne: 79% to 74 % in the same period of time

Adelaide: 47-79%

Time on market

Average time in NSW is 49 days

Average time on market in Victoria 52 days

So while sentiment has taken a hit house valuations are not threatened at the moment. The lowest mortgage rates do not seem to be moving in the near future making this a good time to buy rather than rent. While some banks have gone conservative with their valuations, they are still not an issue. I have seen a surge in requests for market appraisals which could be seasonal (spring round the corner or home owners are looking to upgrade their existing homes.

Statistical facts have been taken from Home Price Guide though in this ever changing environment one would have to rely on professional assistance and none of the above should be considered as advice.