Property Conveyancing 101
For those just getting started in the world of property investing, there’s a heap to learn, not the least of which is the new lingo and jargon. Terms like CGT, LMI, LVR, depreciation, negative gearing, cash flow positive, equity, serviceability, yield, and yes, conveyancing, are enough to send even the most educated newbie investor packing.
What is Property Conveyancing?
Once you’ve found a property to buy and the seller has accepted your offer, it’s time to put a legal professional to work to make the change of ownership a reality.
Conveyancing is the legal process of transferring ownership of a property title from one person or entity to another. The process begins after you’ve exchanged the contracts and comes to a finish once a settlement has taken place.
Whether you’re buying or selling a property, there are legal procedures to adhere to, so both parties in the transaction need representation in this transfer process.
Who is Qualified to Handle Conveyancing?
While you can save some money and purchase a do-it-yourself conveyancing kit, you’re carrying some additional risks by trying to manage the process yourself. If you screw it up, you could end up costing yourself a lot more in the end to fix it. For this reason, most people pay a professional to make sure it’s done right.
Your real estate agent will ask you for the contact information of you conveyancer once the buyer has accepted your offer, so it’s important to find someone you trust before you get to this stage.
Most people use a solicitor to handle their conveyancing, but a qualified settlement agent can also get the job done. People prefer solicitors because they’re not only qualified to handle the conveyancing, but if other legal issues arise, they can advise on these matters, as well.
What Does a Conveyancer Do?
Both the buyer and the seller each need separate representation, so that the conveyancer is not found to be in a conflict of interest.
The two primary roles of the conveyancer are to:
- Confirm that the property transaction meets all of the legal requirements.
- Represent one party in the transfer to ensure that the other party meets their legal responsibilities.
More specifically, the responsibilities of a conveyancer are to:
Check for claims against the title, ensuring there is no dispute on the proper ownership.
- Ensure mortgages get paid off upon settlement.
- Prepare and lodge the appropriate legal documents.
- Hold the deposit money in a trust account.
- Calculate the amount of rates, taxes or body corporate fees owed.
- Settle the property.
- Represent the buyer or seller in their particular interests.
How Do You Find a Reputable Property Conveyancer?
In Steve McKnight’s Property Apprenticeship course, we repeatedly teach the importance of building a strong team. The more you can delegate tasks to other people who are more qualified than you, the more time and energy you can devote to activities that lead to profits.
As such, having a good conveyancer on your team is crucial. Just as you would interview an agent or broker to ensure that they are qualified to be on your team, you’ll want to select a conveyancer with the same level of prudence. So, how do you find someone you can trust?
The best way to build your team of advisors is through referrals from trusted friends or colleagues. Alternatively, if you’re a member of an investor network, you’ll likely find plenty of experienced investors with unbiased recommendations in that group.
If these sources offer no leads, your selling agent will probably also be able to connect you with a solicitor they recommend. Don’t take them at their word. It’s wise to ask any potential new team member for references from other clients that they’ve served.
If all else fails, turn to Google or a local business directory to find someone in your area. The Australian Institute of Conveyancers also provides an online directory to assist consumers who are searching for a conveyancer.
While you can legally handle the conveyancing yourself, the savings are minimal once you consider the time you waste, the aggravation, and the risk of making a serious mistake. It’s a process that’s best left to the experienced professionals.
In our Property Apprenticeship course, Steve has created an entire session on conveyancing where he delves much deeper into the specifics of the topic. He also lists seven crucial action steps every investor should work through between the purchase and settlement.
If you have any questions about conveyancing, feel free to ask about it in the comments section below.