When it comes to buying a home, the process can often seem complicated and overwhelming. This is particularly true for first home buyers who have encountered the terms 'conveyancer' and 'solicitor'. To make it even more confusing, it doesn't help that even industry professionals sometimes use the terms interchangeably!
Both conveyancers and solicitors are responsible for handling legal documentation and processing your transaction. However, there are some key differences that set them apart.
In this blog post, we'll discuss the difference between conveyancers and solicitors, providing you with valuable knowledge that could save you money during your property purchase.
Definition of a Conveyancer
A conveyancer is responsible for overseeing a property transfer from one owner to another. This involves the conveyancer managing any legal documents involved in the purchase and settlement process.
The primary services that a conveyancer offers:
- Preparing, checking, and delivering contracts
- Reviewing mortgage agreements
- Arranging the change of property title between owners
- Scheduling property inspections
- Providing documentation under Territory or State law
As a home buyer, conveyancers can also assist you with your research into a property. This includes finding undisclosed damage or legal disputes, arrears and unpaid taxes, or if the government has a vested interest in the property.
Most notably, while conveyancers can help investigate property issues, they cannot represent you in court. In some instances, property sales can be tied up in litigation, requiring you to hire a lawyer or solicitor for representation.
While professional conveyancers must hold a license, you can convey your own property acquisition. Performing the conveyancing process yourself is one of the many ways to save money on hidden costs associated with your purchase. However, you will be taking full legal responsibility for the property transfer in doing so.
DIY conveyancing is widely considered a risky proposition due to the level of legal risk involved in your property purchase. As a result, you will need to purchase insurance to protect yourself if legal issues arise.
The NSW Conveyancers Licensing Amendment Order 2020 requires all licensed conveyancers to buy professional indemnity insurance, which pays for clients’ damages if a sale goes wrong. However, as a non-professional, you may not receive the same level of insurance as a licensed conveyancer. Ultimately, you will end up with less coverage which means more money you’ll pay out-of-pocket if you make a mistake.
Definition of a Solicitor
Solicitors can provide the same services as conveyancers, including preparing and managing all legal documents associated with property transactions. However, a key difference is that solicitors must have a law degree before becoming qualified to assist with a property transfer.
Solicitors that perform property transfers partially or fully specialise in property law and conveyancing. As lawyers, solicitors have training and experience in legal matters beyond local property laws. They can also provide legal advice and represent clients in court if necessary.
Solicitors in the ACT and QLD
Most Australian States and Territories let you select either a conveyancer or solicitor to oversee your transaction. Although, in the Australian Capital Territory and Queensland, you are legally obliged to use a solicitor for all property sales.
What is the Difference Between a Solicitor and Conveyancer?
Though they ultimately offer the same basic services, the difference between solicitors and conveyancers comes in the kinds of value that they provide to you as a home buyer.
Essentially, the option you choose will depend on your financial situation and the complexity of the sale.
Under Australian law, conveyancers and solicitors must disclose their fees and service costs with you for full transparency. However, you can generally expect a flat rate bill with extra fees charged for various minor services.
- Making copies of documents
- Mortgage registration
- Certifications required at the state and municipal level
Overall, you can expect a cheaper conveyancer's service fee as they cannot offer any further legal services. Meanwhile, you can expect to pay more with a solicitor for their services due to their advanced degrees and their knowledge of the law within a contract of sale.
Solicitors commonly work at an hourly rate. Therefore, the longer a sale stretches, the more expensive their services will be. However, solicitors can recoup this cost for the value they provide.
Both conveyancers and solicitors must have a strong knowledge of local regulations and property law to effectively manage and settle a contract of sale. However, a solicitor’s years of education equip them with a much broader base of knowledge to draw from that could benefit you in your property transactions.
When hiring a solicitor for property conveyancing services, you can expect them to provide you with expert insight that would extend beyond the knowledge of a standard conveyancer. For example, a solicitor could give critical understandings of tax implications, helping you navigate paying capital gains tax.
Selecting a professional service will depend on 4 key factors and considerations.
1. Budget: If you are operating under a tight budget, then a conveyancer will be the right choice for you.
2. Risk: Solicitors make the best choice for high-risk property transfers because they have a more extensive legal education than conveyancers. This reduces the likelihood of a sale falling through for legal reasons.
3. Personal Objectives: If you feel comforted by the idea of extra expertise and security, then you should consider hiring a solicitor to help with your transaction.
4. Type of Transaction: The complexity of a transaction is another key consideration when thinking about conveyancers or solicitors. For example, if you are buying your first home or selling for a low price, a conveyancer should work fine.
Along these same lines, a solicitor should also handle sales that are likely to run into complicated legal territory. They can provide more legal services than a conveyancer, including representing clients in court if the parties become involved in litigation.
Here are some examples to show what situations would require either a conveyancer or solicitor for further clarification.
Buying Your First Home
After years of saving up, you prepare to buy your first home. It’s a small house needing a few minor renovations, consequently bringing the price down.
As a result, the house price is considered relatively low, and the seller is subsequently eager to get rid of it as fast as possible. You can expect that the regular conveyancing transaction would therefore proceed smoothly without the need for legal counsel.
In this instance, a conveyancer can easily handle this simple property transaction and help you save money on unnecessary costs.
Home Sale as a Part of Divorce Proceedings
You and your partner own a large tract of land, including your house and extensive investment property portfolio. When you get divorced, you agree to split up ownership of your land, including selling a portion and splitting the profits.
Because this situation involves multiple sales and exchanges of ownership, a solicitor is the best choice to manage the process.
How Do You Find Good Solicitors and Conveyancers?
In general, finding a good conveyancer or solicitor requires some asking around. A few ways to find a trustworthy conveyancer include:
- Ask friends or your real estate agent for referrals
- Check online reviews and testimonials
Always conduct your own research before you hire a conveyancer or solicitor to make sure an agent is legitimate and has a solid track record for conveyancing.
Is a Conveyancer a Solicitor?
Conveyancers are not solicitors, but both perform the same legal paperwork services for property sales. Conveyancers are not lawyers and cannot replace solicitors where legal services are required.
Is it Cheaper to Use a Solicitor or Conveyancer?
Conveyancers offer lower rates than solicitors. They also typically provide services at fixed rates rather than hourly.
Why Do I Need a Conveyancer or Solicitor?
A conveyancer or solicitor ensures that a property transaction follows local laws and regulations. All Australian states and territories require either a conveyancer or solicitor to manage the legal process of buying and selling property.