Buying and selling a property is a lengthy and complicated process that can be frustrating and tedious especially for buyers that are new to the process. For this reason, they will hire a settlement agent to make the process seamless and comply with all important details of the transaction.
A settlement agent is also known as a conveyancer or a legal assistant in a law firm. They facilitate the undertaking of proper paperwork and ensure that their client's interests are taken care of throughout the property selling or buying process. The paperwork involves retrieval of official copies of title from land registry, reviewing the contract of sale, preparing and sending transfer deed to the other party, facilitation of funds transfer, updating property ownership details with land registry, etc.
With the recent introduction of the national electronic conveyancing platform, the majority of transactions are conducted online.
As a qualification to be a settlement agent, you must hold a valid settlement agent license issued by the department of commerce. To operate, you need to be conversant with the process of buying and selling the property within your state. They must also advise their client when they need legal advice along the process if need be.
To succeed as a settlement agent in todays competitive environment they need to give top-notch services at a competitive rate. Shared below are a few tips to consider when making a decision to appoint a settlement agent to carry out your work.
1. Level of experience: How many similar settlements have they dealt with before? How long have they worked as a settlement agent? Do they have the backing of an organization or team? Are they a one man band operating from home, and are you going to have assigned to your file a senior conveyancer or a junior legal assistant who has little experience in handling complex issues?
2. Type of property: When obtaining a quote, the kind of property is very crucial. The process of conveyancing a commercial property is more complex and costly compared to residential property. Hence, settlement agent quote for the commercial property will be higher than the latter. Also, when evaluating the type of property, it is crucial to consider leasehold, shared ownership, etc.
3. Understand the fees and costs involved:
There is the cost of the settlement agent , this fee is generally negotiable, but remember cheap is not always best.
There are also statutory fees charged for the buying or selling of property. These fees affect the overall costs covered in the settlement quote, and will be the same with whomever you choose they include;
- Transfer duty (applicable when purchasing): previously referred to as stamp duty. It is a compulsory fee to the buyer which is usually dependent on the use and value of the property.
- Title search: it is performed to verify the property's legal owner, limitation of use of the property, and any other encumbrances associated with the property in question. Mostly, multiple searches may be required, and each one of them charged independently. A title search is vital to ensure the title is clear before the transfer of ownership.
- Local authority enquiry: the fee charged to update ownership details of the property with the local council, state revenue department and Water Corporation. It checks for any outstanding land tax, water rates, and council rates to ensure that these are settled during settlement and not passed on to the new owner.
4. Professional settlement fee:
The amount charged for expertise and time spent to complete the task. Time can be charged on an hourly basis,(generally only by solicitors) or as a package for the complete process. Expertise fee includes preparation of documents, conduction of searches, and any other process involved during settlement.
5. Administrative costs:
These are disbursement costs incurred when undertaking the settlement process; they include filing, printing, telephone calls, facsimiles, photocopies, postage, stationery, etc. Sometimes these costs are encompassed in the professional settlement fees.
6. Unforeseen complications:
Some property transactions have potential complexity risk, and as a settlement agent, your fee should be able to cover any unexpected issues that might come up during the settlement process. Some of these potentially complicated transactions include; subdivision and off-the-plan purchases, delayed financing, lost title deed, property structures unapproved by the council. Your settlement quote should be able to cater for any anticipated events, to avoid future conflicts with the client in case matters arise. Always ask to see and read the Cost Disclosure or Product Disclosure document that will highlight any extra costs.
Quick tips for choosing a good settlement agent.
- They avoid charging hidden fees: ask for them to be straight up with the costs so you can plan and budget accordingly .
- Be aware of overcharging ,always ask for the Product Disclosure document.
- Always advise your settlement agent of known anomalies, If you foresee any issues that would cost legally or financially within the process, it is crucial to advise accordingly, be straight up with issues
- Be open for negotiation: some issues relevant to the contract may require give and take to come to agreements.
- Communication is critical for any successful settlement: keep informed throughout the process; this also includes replying to your settlement agent questions promptly.
A good settlement agent should be proactive, to ensure timely completion of tasks and that the process is smooth for all concerned.
Following the tips and insights shared in this article will not only assist you to understand the process but also make the process a seamless one .