Why You Should ALWAYS Use a Solicitor When Buying or Selling a House!
Today I'm talking to my friend Matthew Keating who is a solicitor for Keir Steele. The question we're answering today is:
Why is it so important to use a solicitor when buying or selling a property?
Let's cut right to the interesting stuff!
Rob: Tell us about a time when you saved someone money when they were buying or selling.
Matt: So, the one that springs to mind is essentially, the whole conveyance was very smooth, everything went according to plan. Probably three to four hours before settlement was due to be effected after lunch on a Friday we had received instructions from the buyers solicited that they wanted a huge price reduction for issues they had noticed in the property when they conducted their pre-settlement that morning.
Rob: Okay wait, huge like $1,500?
Matt: Tens of thousands of dollars.
Rob: Oh my God.
Matt: Yeah and suddenly having a lawyer, we were able to negotiate for the seller and liaise with the buyer's solicitor to come to a reasonable position with respect to that reduction. We also had the agent go out and conduct more inspections on the property and yet at the end of the day we were able to settle the property before the termination time of 4:00 p.m. and everyone was happy.
And without losing them thousands and thousands of dollars. They had to concede a little bit but I think at the end of they day they were more than happy to concede a few thousand when they were talking about tens of thousands.
Rob: Okay so there's a time you worked for the sellers. Now you guys also work for buyers, and I'll talk about a time when a solicitor saved a buyer of mine a lot of money recently. We had conducted a building and pest inspection and then we had this huge rain event in Townsville a couple of weeks ago and the roof leaked and it damaged the interior of the house. Look, I worked for the sellers as the agent but really, I didn't want a buyer buying a dodgy house, and that buyer went to their solicitor and they were able to work out a solution that worked for the buyer.
Matt: That's right and that's the benefit of having a solicitor. So when you wave your rights under the building and pest inspection condition of a contract, that ultimately is the end of it, you're buying a property at your own risk so you need to make sure that you're satisfied with the structural integrity of the property. Certainly the massive rain event that we've had in Townsville and Far North Queensland recently, a lot of building inspectors are focusing on roofs.
And I've had probably four or so contracts in the last fortnight where we've had requests to replace the roof. Certainly because the focus is on whether or not they have integrity for wet weather events. So having a solicitor acting on your behalf you might be able to negotiate post-waiver of that inspection clause to come to some resolution for evidence that was uncovered prior to that rain event occurring.
Rob: Okay so this can happen because of rain or cyclones or someone breaking into the property, all sorts of things can happen. So it is really critical in that time period between when the property goes under contract and when the property settles, to keep in touch with your solicitor.
Matt: Definitely, that's one of the main things that you need to bare in mind is that we're acting for you, whether or not you're buying or selling a property. So you need to make sure that you keep us in the loop of what's going on. A lot of the times a client will talk to the agent and they just think that we know what's going on, but that's not often the case. So you need to make sure that instructions come through your lawyer, we then keep the agent in the loop in the same way that I would hope that you Rob would keep me in the loop.
Rob: I always do.
Matt: Exactly, with respect to transactions and conditions and inspections, because we're all trying to get to the same result at the end of the day. A buyer wants to move into a property, a seller wants to sell it and move on. So I think if we're all in the loop and keeping each other fully informed with what's going on, we'll get there much quicker and a lot less heartache.
Rob: Okay fantastic, so I guess the other burning question is, oh my God someone says solicitor people think hundreds of thousands of dollars of costs. Talk a little bit about what it actually costs.
Matt: Yeah, so conveyancings a lot more competitive than a lot of other areas of law and I think because of that competition, prices for conveyancing are very, very reasonable compared to certainly what you're paying for the property. Generally conveyancing fees are anywhere from say $600 to $1,000 dollars depending on what you're purchasing. For example, our fees here for a purchase under $500,000 are $750 plus GST and any outliers that we incur on your behalf. So outliers are generally searches that we do to protect you and conduct due diligence on the property, they generally come in at about four to $500 dollars.
Rob: Okay great, so if the agent says it doesn't flood, I mean all buyers trust agents.
Definitely, same as lawyers.
Rob: And it's always better to have a solicitor just go through the process and make sure, I mean you guys probably have 20 or 30 steps you conduct with every property.
So I call them cover your bum searches just to make sure that you're not relying on any representation that someone else has given you and that you're actually doing an investigation on your own so that you can tick it off and say yes, the property on the council records, doesn't flood. Or yes, has council approval for an extension that was put on.
Rob: Okay, so tell me about one top tip you would recommend to buyers or sellers that they may not know.
So something that should be brought to buyer's attentions is if you're under a Real Estate Institute of Queensland contract for example, standard condition 8.1, that condition places risk in the property on the buyer at 5:00 p.m. on the next business day after the contract date. What that means is effectively that the buyer needs to obtain coverage of insurance for the property because if anything happens to that property it's the buyer's obligation to fix it during that contract period.
Rob: So even if it hasn't settled, it's still the buyer's obligation?
Yep, and that's the first question that we ask them when we get a contract from you Rob, or any agent is have you as a buyer organised a cover note of insurance? And a lot of buyers aren't aware of that and are quite surprised that they have to do that so it's certainly something that should be brought to everyone's attention that yes, during a contract period a buyer is more often than not liable for the property and any damage that occurs.
Rob: Was there anything else you wanted to talk about specifically?
Yeah, so keeping us in the loop is really important as I was referring to earlier. There are mechanisms that we can put in place if you're going out of the country, for example. And certainly in a Garrison City like Townsville, we often have defence force families where one partner is deployed at a moment's notice, we can put in place very quickly, powers of attorney or certain instruction documents so that we can rely on the partner who's not going overseas to provide those instructions and sign the relevant documentation.
But certainly the most important thing is that you consider getting a lawyer to assist you in any of your property transactions. it's the most important and most expensive transaction that you'll have in your lifetime so spending one or two thousand dollars on a lawyer certainly can save you a lot of heartache down the track.
Rob: Absolutely and whether it's Matt or someone else, in Townsville there's probably 80 to 100 good conveyancers and lawyers who can help you with that transaction. But as someone who has transacted over 250 properties myself, I certainly couldn't do all those searches and checks. I can't imagine someone doing it just on their own without having the property experience I do, let alone you do. What, you guys have probably handled thousands.
Definitely, and there are firms in Townsville that are very longstanding and have experts in the field of property law and by no means am I an expert, but what you need to ensure is that there are 20 pieces of legislation that govern conveyancing in Queensland. Those include transfer duty obligations, building permits, town planning approvals. You need a team who can act for you to ensure that those are all adhered to and that you're protected when you're purchasing a property.
Rob: Fantastic, okay so can you can find Matt by googling Keir Steele Lawyers. And if you have any other questions about whether you should use a conveyancer or about real estate in general, feel free to drop a comment below and I will try to answer them in my next video. This is Rob Levy from RE/MAX Excellence and Matt Keating from Keir Steele.