This is the technical word that is used to describe the way that property is legally transferred from one person to another.
Solicitors and conveyancing companies
Most conveyancing is done by either solicitors or, in some States, conveyancing companies.
Whichever you choose, there are a few things you should think about:
- What's the cost? This is an obvious question. Many solicitors and conveyancing companies offer fixed price conveyancing. But make sure you know what you are getting for the fixed cost. What if something goes wrong? What will you be charged if the sale collapses for some reason? If they don't offer a fixed price, make sure you know how they will itemise their fees.
- What protection do they have if they make a mistake? Solicitors must have insurance which covers faulty work. In addition there is a fidelity fund that covers situations where the insurance does not apply. Check the protection provided by conveyancing companies.
- Who will supervise the work? It's common for conveyancing to be handled by clerks. You should make sure that the person who is responsible knows what they are doing.
- Are they members of any association? Do they have any special qualifications? Some solicitors are accredited property law specialists.
- Are there other issues that you may need advice about? For instance, do you need advice about signing an agreement with an agent? Will the sale have capital gains tax implications? Should you change your will? Are there any family law implications as a result of the sale? If so, you might be able to negotiate a price where a solicitor will undertake all the necessary work at one time.
Some other issues
There are other issues that may require professional advice, whether from a lawyer and/or financial advisor:
- Are there tax implications? For instance, what will be the effect on capital gains tax, which is a tax payable on the capital gain made in the sale of investment properties. It is calculated on the basis of the profit earned in the final sale price compared with the original purchase price. This is also an issue that can be explained by your solicitor or professional advisors.
- Are there any problems with the title or legal issues that you need to consider?
- Will you be in a position to cover your mortgage obligations?
- Is the housing loan fixed (capped) or variable, and which would be better for your situation?
- Is the purchase part of a long term financial strategy that maximises your future financial stability?
- What is the reasonable outlook for interest rates and the price of housing?
There are a number of do-it-yourself kits available in some States and Territories.
- whether the conveyancing looks straightforward (are there caveats, covenants, has the house been owner-built)?
- whether you have the time to do-it-yourself?
- what protection is provided if something goes wrong?
- is there any back-up if you're unsure what to do at any stage?
Of course, some people are happy doing their own conveyancing simply because they've done it themselves before. Beware! Laws change frequently and just because you did it all five years ago, doesn't mean that there may not be a surprise lurking around the corner that might catch you out.
What can go wrong?
There are a number of traps that can arise when you buy a house or property, including (amongst others):
- Make sure the contract is correctly prepared and you have disclosed everything you need to.
- If you have bought another property and the sale falls through, you may be paying interest on your purchase until your sale finally goes through.
- Make sure your answers to Requisitions on Title do not leave you open to liability.
- You need to think about how you handle chattels on the property. What are chattels and what are fixtures may not always be clear.
- Make sure the mortgage can be paid out and any caveats will be withdrawn.
- If you are an owner-builder, make sure you provide the buyer with all the necessary reports, guarantees and insurance.
There are a myriad of other issues that may crop up – remember the risk will be yours!
Last Updated – April 2010
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