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Hidden Costs of Budget Conveyancing

Category: Buying, Selling, Landlords

For most Australians, real estate is one of the most valuable assets they will ever deal with. When the time comes to buy or sell these assets both purchasers and  vendors are faced with the option of using either lawyers or conveyancers; a decision that can be very confusing when they are offered what seems to be the same service by two different professionals. Often the price of a conveyancer is less than the price of having a conveyance performed by a lawyer, but many do not consider the potential 'cost' of that saving.

The difference in price often is derived from a difference in knowledge and experience. Generally conveyancers have knowledge specifically in transacting property; the practices and procedures. Lawyers on the other hand have specific knowledge about property law as a whole, coupled with broader knowledge of the law in general. This means that a lawyer's advice is not limited to the conveyance, but on important issues such as the tax implications of the property transaction, or how the sale may affect family law proceedings.

Many people choose a conveyancer if the transaction is 'straightforward' and not complex; and if there are no hiccups they can come out unscathed and with an extra small saving in their pocket. However, it is often the 'simple' conveyances that go wrong; where a buyer ends up having to pay thousands in a land tax bill at settlement, a developer terminates its contract with a buyer who has waited 2 years for their unit to be built, a seller loses half his profits on sale to capital gains tax, or (most common) when a purchaser terminates the contract last minute because the vendors statement failed to contain information which the vendor didn't even know he was obliged to supply! 

These are problems that can happen quickly and easily and end up costing tens of thousands of dollars even on an inexpensive property purchase. Why take such a risk when you are dealing with the most expensive asset you own? 

Due to the nature of property law, most of the potential pit falls and perils in a conveyance are only able to be avoided before the contract is signed and with proper legal advice. Quite often when people engage a conveyancer and an issue arises, the Conveyancer will often need to send the client off to see a lawyer costing significantly more to the client than if they had hired a lawyer to begin with. 

If you are selling your property, always engage a professional early to prepare the Contract and Vendors Statement prior to marketing the property for sale. If you are buying a property or considering making an offer to buy at auction, it is important to have the documents reviewed before signing; as most properties sold in Victoria are at auctions with no cooling-off period and very limited rights for a purchaser to terminate you need to be certain you know what you are buying.