How much are conveyancing costs in 2022?
Buying real estate is always pretty thrilling, whether you’re leaving behind the university share house or snapping up that dream apartment so you can grow old by the seaside. It does also come with some unavoidable costs. It’s important to know how much you’re really up for so you don’t get a nasty shock when it comes to settlement.
Not counting the price of the property itself, costs include:
- Stamp duty
- Conveyancing costs
- Various administration fees, including mortgage establishment fees
- Moving costs
- Any fees associated with your rental, i.e., lease break fees
Faced with this list, it can be tempting to try and cut costs by DIYing where you can.
Some things, however, are better left to the professionals. Like conveyancing. While you can legally do your own conveyancing, the risk of getting it wrong far outweighs the money you could save.
Average conveyancing fees vary between states and territories. Conveyancing costs for buying a house differ from the conveyancing cost for selling. Of course, if you’re buying and selling, there will be two lots of fees.
As a rough guide, the average conveyancing cost in 2022 can range from as little as $500 to $2000+. Some conveyancers charge a sliding fee depending on the cost of the property, but most charge a flat rate.
There are a few reasons for the discrepancy. The conveyancing cost covers both the professional service fee and any searches that need to be done. These vary for a number of reasons, including:
- Variations in legislation and processes between different states
- Circumstances of the buyer and seller
- Whether your property is a house, land or apartment/unit
- If your property is strata or community title
Some conveyancers also charge additional costs for anything that falls outside the narrow definition of a ‘standard conveyance’, while others roll all their services into a single fee. That cut price fee may not end up cheaper in the long run.
We spoke to Janukshi Jamonts, Director and property law specialist at Elevated Legal, to find out what’s involved in the conveyancing process and why a conveyancing solicitor’s fees are money well spent.
Janukshi is a conveyancing guru, having acted on transactions from huge developments and multi-million dollar commercial properties to mum-and-dad residential homes. She helps buyers and sellers from the beginning of their home-buying process right through to settlement and is also on the ACT Property Council.
What is conveyancing?
Conveyancing refers to the legal and statutory process of transferring a real estate title from the previous owner to the new owner. It includes preparing, executing and lodging legal documents as required by the legislation in your state or territory.
Conveyancing is done either by solicitors or by specialist licensed conveyancers. This varies from state to state. If you’re transferring property in NSW or the ACT, you will use a solicitor. You can also do your own conveyancing.
Conveyancing fees can be divided into two categories.
The first is the amount that you pay to the solicitor or conveyancer for their time and expertise. This might be a fixed amount or a sliding scale with a ‘base’ fee plus additional charges for extra work on top.
The second includes the amounts payable to various authorities for the required searches and due diligence. Your solicitor will pay these for you and then charge the amount back. This should be itemised on your final invoice, usually under a category heading of ‘disbursements’.
“We offer fixed price conveyancing for our professional services, with a fixed fee for the ACT of $1,600 and a fixed fee for NSW of $1,800 to $2,000,” Janukshi explains.
- A title search, which checks that the property belongs to the person who is selling it, and that there are no restrictions that would impede the sale
- Compliance certificate and search fees charged by government authorities
- Registration of mortgage fee
- Registration of transfer fee
It’s important to make sure that you understand the costs ahead of time. Low-cost conveyancing may seem like a great deal, but if it’s not all-inclusive you can get a nasty case of bill shock when it’s all added together.
Tempted to do your own conveyancing and save some money? Legally, you can, but it is not recommended.
“Conveyancing seems like something anyone can do,” says Janukshi, “but I think it’s extremely important to get the best representation. Given that buying a property is such an expensive thing, it would be prudent to make sure that it goes smoothly. I often get involved once a situation has gone sideways, and then it costs more to fix the situation."
What could go wrong?
“Lots of things. You might miss a compliance certificate, which needs to be issued before settlement or the bank won’t provide funds,” Janukshi warns.
“There might be an error in a report, or it’s expired.
“Or maybe there is something hidden in the report that you might not notice but we will pick up.
“You also need to make sure that the seller is actually the seller. Obtaining title from a fraudulent sale can open up all sorts of problems.”
Despite everyone’s best intentions, sometimes conveyances become complicated or protracted. It’s not always obvious from the outset which ones they’ll be. You might think that your conveyance is straightforward, only to find out that there’s more to it than meets the eye.
“Where the property settlement is attached to a dispute, like a complicated divorce, it can get protracted,” Janukshi says.
“Perhaps the husband and wife don’t agree on selling the house, for example.
“Another case would be where there are a string of settlements that have to be timed to settle in a particular order and then one of them gets held up.”
For these reasons, Janukshi recommends talking to a conveyancing solicitor before the contract is signed.
“You want advice on the contract terms ahead of time so that it reflects what you’re selling, or you understand what you’re buying,” she says.
“You don't want to settle and then discover that there’s an unapproved structure on site, like a deck or a shed, or an easement that stops you developing the dream home you had in mind.”
The conveyancing process
When you hire a conveyancer, they will assist with some or all of the following:
- Helping you to draft the contract for sale, if you’re the seller, or advising on its terms and conditions if you’re the buyer
- Arranging building and pest inspections
- If you are buying into a strata scheme, examining the strata inspection report, minutes and financial information
- Checking for caveats or liens on the title that may impede settlement
- Conducting government searches to identify easements or other restrictions
- Conducting due diligence to discover any undisclosed adverse information. This could include compliance of building work, check on the heritage status of a property and a number of other things depending on the nature of the transaction.
- Exchanging the contract of sale
- Checking for outstanding rates, water arrears including land tax
- Liaising with the relevant stakeholder and attending to settlement.
- Facilitating the stamp duty payments
“We often see instances where the parties have an older report and the information has expired,” Janukshi says. “We do updated reports so that they know the information is up to date, and nothing has happened to the title in the meantime.”
And that’s not all! Conveyancing also includes:
- Obtaining readings for the property if you’re the seller, for example a water meter reading, so that the amounts can be adjusted between seller and buyer
- Calculating adjustments for council and water rates between the parties
- Overseeing the change of title
- Liaising with banks to schedule settlement and ensure all loan documentation has been provided
- Attending settlement: in both the ACT and NSW most conveyances take place via the e-conveyancing platform Pexa.
- Completing any final checks before settlement
How to choose a conveyancer
Need a conveyancer or solicitor? Here’s how to choose the right one for you.
- Ask friends or family for recommendations. Nothing beats real-life experience for an accurate picture of how well someone performs.
- Ask your mortgage broker and/or real estate agent for recommendations. They deal with hundreds of conveyancers and will know which ones are easy to deal with and will be suitable for your needs.
- Check the public licensing register in your state to make sure they're licensed and registered.
- Ask them in detail about their costs. Make sure you know what their fee covers and what it does not, how they deal with search fees and what they estimate the bottom line to be.
- Check that they have experience with the type of property you want to convey. An off-plan development requires different expertise than a commercial transaction or established residential, for example.
Conveyancing costs are a small price to pay for peace of mind in one of the biggest financial decisions you will make. Contact your local Independent agent for recommendations
Got selling on the brain?
Why not get a free appraisal online now or get in contact with us to find out how much your property might be worth in the current market?