Conveyancing Costs: what fees does a conveyancer charge?
It’s a gift to be able to approach your conveyancing without fear of cost. And this gift is the product of a good relationship with the right solicitor. Information is power. Although every transaction is unique and each will have its unforeseen twists and turns until the day of settlement, good representation can make a big difference for your general sanity. A smart consumer can take charge of the process by doing three important things:
- Choose a firm that specializes in conveyancing and that has a reputation for good client communication
- Get several quotes before retaining a conveyancer or solicitor. Owen Hodges Mortgage Solutions Pty Ltd (OHMS) provides free quotes, and can be reached any time at 1800 770 780.
- When you evaluate those estimates, look beyond the bottom line. An inclusive estimate may return a higher number at first, but it is much better to have a realistic grasp of expenses at the start than to have to deal with an unpleasant shock at the end.
At Owen Hodges we would like to help you see the big picture. We believe that a well-informed consumer is a confident one. To help you get started, let’s look at three big categories: conveyancing costs, purchase costs, and miscellaneous expenses. It would not hurt to keep a checklist.
Legal Service Fees and Disbursements
Conveyancing fees are generally the sum of your legal service fees and disbursements. Many of the items in the latter category are small, but the list is long, so you should remain aware of them.
In general, you should expect your conveyancing fees to range between $1,500 and $3,000. Before retaining a solicitor or conveyancer, you should always ask for an itemized statement of likely costs and confirm that you will be kept apprised of changes in this estimate.
Legal Service Fees
There is no official industry charge for conveyancing, so fees will vary among solicitors. Some charge a flat fee and others may charge a based on the purchase price. As you surely know, however, the first rule in retaining professional services is that you get what you pay for. Penny wise is pound foolish, so the cheapest price may not be the best bargain. This is what you should expect your representative to do for you.
If you are a seller, your solicitor may draft the contract of sale and negotiate about changes.
If you are a buyer, your solicitor will review this contract prior to exchange and also negotiate changes, if appropriate. A buyer’s solicitor will also review mortgage documents and collect the necessary certificates.
Whether you are a buyer or seller, your solicitor will accompany you to the settlement, perform a final review of documents, and patiently, thoroughly answer any questions you may have.
The list is long and the charges may seem small, but they do add up. Depending on your locality, these may include costs for:
- Title search
- Local council building certificate
- Local council certificate
- Drainage diagram
- Water rates certificate
- Local council rates certificate
- Land tax clearance certificate
- Department of Education certificate,
- State rail authority certificate,
- Environmental Protection Authority certificate
- Roads & Traffic Authority certificate
- Transgrid, electricity/power stations
- Outstanding notices for council
- Photocopying postage, stationery and faxes
It is very detailed and mundane work, of course, until there’s a problem. Better to let a professional sail through it expeditiously.
Purchase Price Costs
At the outset, determine whether the purchase price includes the Goods & Services Tax (GST) or whether this will be included as an additional item. This may make a difference.
A deposit will be due at the time contracts are exchanged. For most buyers, the remainder of the purchase price includes some cash and some borrowed funds. The costs associated with a mortgage are payable separate and apart from conveyancing fees. Mortgage costs may include:
- Mortgage establishment fees, which may include an application fee and a valuation fee. If you are able to work with a firm of solicitors who have an established relationship with a number of lenders, you may be able to streamline your mortgage application process and minimize mortgage processing costs. Owen Hodges Lawyers is accredited with a range of lenders in addition to OHMS, an affiliated mortgage brokerage.
- Mortgage insurance, and
- Mortgage stamp duty. This has been abolished in New South Wales, but may be a concern with cross border transactions.
In addition to mortgage expenses, you should remain aware of the contract stamp duty. This must be paid before settlement if you are financing the purchase, and otherwise within three months of the date contracts are exchanged to avoid an interest penalty. Keep in mind that this could occur before the date of settlement. The contract stamp duty is calculated on a sliding scale based on purchase price.
In addition to fees and disbursements listed above, you may have additional costs relating to your purchase or sale. Four that will be due early on in the process include:
- Building inspections
- Pest inspections
- Survey reports, and
- Home building insurance
In addition to these items, council rates, water rates and strata levies may be adjusted at the time of settlement, based on the assessment date.
Remember that the Goal is to Maintain Equanimity
You may be an unflappable professional investor in property. More than likely you are not. Even if this is your first property transaction, you should not have to feel that mistakes are part of a learning process. Not so. With proper advice and representation, mistakes are not part of the equation. An important hallmark of a good professional relationship is regular communication about the all-important issue of cost. As a consumer, this is a standard you should be prepared to insist upon. As conveyancing professionals, we are happy to help you build this strength.