Buying or selling a home can be a stressful and costly time. There are stamp duty costs, outgoing fees, bank fees, agent commission (if selling). Therefore, DIY Conveyancing is understandable when trying to cut costs. But is it worth it cutting costs here?
What is Conveyancing?
The Conveyancing process is an integral part of buying or selling your home. This is the stage where all legal and financial work is conducted.
At first glance, it may look like a straight forward process. However, it involves more than simply completing paperwork. There is a great deal of complexity involved in the preparation of legal documents to transfer a Title from one person to another
What does a Conveyancer do?
A licensed Conveyancer is qualified to conduct work in the property area. Some Conveyancers are also qualified to carry out work related to small business and commercial leasing transactions.
A licensed Conveyancer will ensure that your legal rights are protected and that all the legal steps are followed and given the attention required so that the transaction runs smoothly. The work involved will vary depending on how complex the matter is
Some of the work conducted by a licensed Conveyancer involves: –
- Preparation of a Contract of Sale and Vendor’s Statement if you are selling – a licensed Conveyancer will ensure that full disclosure is given and that all conditions and any other special requirements are included. A solid Contract of Sale must give full disclosure in relation to the property and give clear details of each parties’ obligations. Any error, ambiguity or failure to give full disclosure could render the Contract and Vendor’s Statement defective which could compromise the sale or give rise to a costly litigation case.
- Review of a Contract of Sale and Vendor’s Statement if you are purchasing – a licensed Conveyancer will review the Contract and Vendor’s Statement to ensure that there are no errors or unusual conditions. In order to protect your legal interest and ensure a smooth settlement, your Conveyancer may also recommend some amendments or inclusion of conditions.
It is always advisable to have your Contract reviewed before you sign it.
Other work conducted by your representative in relation to your purchase include: –
- Monitoring all dates and deadlines
- Conducting checks on the property
- Liaising with banks to attend to all finance requirements for settlement
- Attend to adjustment of rates and outgoings
- Arrange for stamp duty to be assessed and payment of it
- Complete all legal documents to ensure that the transfer of ownership is done correctly
- Facilitate the online settlement process. Including directing to whom settlement proceeds should be paid.
Can I do my own Conveyancing?
Yes, you can conduct your own Conveyancing. However, the process can be stressful and prove quite costly if you are not familiar with the legal steps and requirements to ensure the transaction goes smoothly.
Disadvantages of DIY conveyancing process
Costly breaches of Contract
A conveyancer is an integral part of a smooth and straightforward property transaction, because they have the training, skill and experience to manage the process from beginning to end – including any curveballs that get thrown along the way. By handling the transaction yourself, lack of experience and knowledge could lead to expensive fines or a breach of contract.
For instance, a purchaser in Victoria purchased a home and failed to negotiate a condition making the contract subject to finance. The purchaser was not able to obtain finance and was not able to terminate the Contract as there was no condition in the contract allowing him to be
to be released from it. In this instance, the purchaser had no choice but to forfeit his deposit as he could not proceed with the purchase and lost $49,000. To further note, the Vendor would also have had the right to sue the purchaser for any further damages incurred eg real estate agent’s relisting costs, additional commissions, difference in sale price. The purchaser was substantially out of pocket because he didn’t have an experienced conveyancer advising him along the way which could have avoided the breach of contract.
You may not be aware of the requirements to protect your legal interest
If you have not received legal advice in relation to your purchase or sale, you may miss important points in the Contract which will automatically place you at a disadvantage.
You may also not be aware of legal or procedural changes thus compromising your legal rights.
For example – A Vendor may not be aware that disclosure requirements in relation to owner builder are quite different to those required for a registered builder. If you overlook important legal requirements, you may find yourself on the wrong end of an expensive lawsuit.
The importance of detail
Don’t underestimate how many documents, forms, deadlines and fine details are involved in buying or selling a property. If you don’t know what a duties form is from a section 32, you may leave an important step out. Each step in the conveyancing process includes intricate details and it can be easy to overlook something important.
For example, a Purchaser purchasing a new property may not be aware of the GST Withholding obligations set by the ATO. Failure to comply could result in payment of a fine.
Professional Indemnity Insurance
If you do your own conveyancing, you will not be covered by professional indemnity insurance.
Professional indemnity insurance is an insurance that will protect a licensed conveyancer or professional against claims for damages resulting from negligent service or advice or an error made in a conveyancing transaction.
There is a lot at stake and any error can become a very costly exercise, If you are not confident and don’t have the knowledge required to conduct a conveyancing transaction, you should engage the services of a qualified professional.
It costs you time
Your time is valuable and better spent focusing on your packing and moving rather than trying to get yourself up to speed with the conveyancing process requirements.
Technology is changing everything
New technology has been introduced that has taken conveyancing in Victoria online. The platform that is used is called PEXA. Paper transactions are a thing of the past.
While it may seem like a good idea at the time, the time spent navigating through legal terminology and documents could prove to be overwhelming and your inexperience may result in costly legal errors. In most cases you’ll find it is always best to engage the services of a professional.