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Real Estate Conveyancing Kits for Victoria Australia Edition: March 2008

• The 3 conveyancing essentials
• Your conveyancing options
• What is conveyancing anyway?
• The big marketing hoax - professional indemnity

The Conveyancing Kit from Legal Kits of Victoria makes you an informed consumer when you buy or sell real estate, and that makes the difference.

Signing a contract you don't really understand and then going off to a lawyer or "conveyancer" is a recipe for trouble.  In most cases you are stuck with what you have signed - and high priced lawyers can't change that.

Lawyers might squabble with the other side (at great expense to you) but end up advising you that "caving in" is your only real option.

Even if you get a lawyer involved before you sign you are not much better off because of the limits to what they do. They don't see the property and they are not involved in negotiations for it - they just deal with the paperwork after the event.

In a book called "The Conveyancing Fraud", English solicitor Michael Joseph pointed out the obvious - you can't see faults in a property if you don't look and conveyancers don't look. Paid conveyancing is a fraud, he said, because it leads people to believe they are "protected" in ways they are not. In practice he said, the most important things are "left to chance".

Fortunately there is an answer to all this - one that gives you:

• Personal control
• Maximum awareness
• No possibility of conveyancer negligence.

The answer is to do it yourself. Find out how real estate is traded, and then keep personal control over it.

The 3 Conveyancing Essentials

Proper conveyancing has three essentials:

1. Investigation (before & after signing a Contract of Sale)
2. Negotiation, and
3. Paperwork.

Paid conveyancers work behind desks, which means they do only the paperwork, and leave the most important parts (investigation and negotiation) to their clients - who might as well be doing the whole thing themselves.

Your Conveyancing Options

You have three conveyancing options. You can:

1. do it yourself
2. pay a solicitor, or
3. pay a non-solicitor conveyancer.

Solicitors fees vary from about $600 to $1000, and since the introduction of a licensing system for non-solicitor conveyancers in mid 2008 they seem to charge much the same. But watch out for hidden extras (the bill could be more than you expected if it is padded with extras like phone calls, photocopying, storage, filing, mark-ups on government charges, premiums for dealing with banks, or even fictitious items).

The Lowest Cost - Maximum Control way

"Self-Help" conveyancing is the lowest cost, maximum safety, maximum control way, and your key to it is the Conveyancing Kit from Legal Kits of Victoria. It costs only $88 (including GST), and includes:

1. a step-by-step procedure for buyers
   
2. a step-by-step procedure for sellers
   
3. the documents needed for both buying and selling (including section 32 "Vendor Statements" and Contracts of Sale)
   
4. a chapter describing each step on the way. (This gives you a much better understanding than those who sign blind and then go off to a conveyancer. By then it is too late. The inspection is over, the negotiation is over, and you are stuck with what you have)
   
5. extracts of legislation, so that you know the rules (and are able to pick the nonsense that many people spout in the real estate game).

The DIY Conveyancing Kit pays for itself many times over. (Even the GST tax that you pay on a conveyancer's fee is almost as much as the Conveyancing Kit). DIY is the winning way to go.

What is Conveyancing anyway?

"Conveyancing" means transferring house ownership.

For sellers it starts before you even market the property, with the preparation of a "Section 32 Vendor's Statement" and preferably a Contract of Sale too.

For buyers it should start before they even start looking at houses, because then they are "forearmed". Unfortunately, most buyers limit their options by thinking about conveyancing only after they have signed a contract of sale. That approach is dangerous because if there is anything wrong with the property it is too late to do anything about it. (Buyers who think it is clever to consult a solicitor about a contract before signing sometimes decide it was a bad idea - they lose any "cooling-off" rights in cold blood).

The basic conveyancing process is really quite simple:

1. The seller (who is called the "vendor") prepares a document called a "Vendor's Statement"
   
2. The seller looks for offers and accepts one
   
3. The buyer and seller sign a Contract of Sale, and the buyer pays a deposit (often 10%)
   
4. Both sides prepare for "settlement", at which the buyer hands over the outstanding money, and the seller hands over the documents needed to transfer ownership
   
5. The buyer pays a tax called stamp duty, and registers the change of ownership at the Land Registry.

"What if something goes wrong?"

Scare talk is like an epidemic in our society these days isn't it, but when lawyers / conveyancers can't come up with a rational argument then scare talk is their weapon of choice. They treat intelligent adults as children who will tremble at the thought of something "going wrong" - and shell out a fortune in "protection money".

Yet solicitors/conveyancers can actually increase the chance that something will go wrong. Why? Because conveyancing clerks with 100 files on their desk just don't have time to keep track of them all. Important things can get forgotten, and when they do it is usually the client who loses. All the talk of "conveyancing protection" can turn to dust before your eyes.

You don't have to worry about this when you do your own conveyancing, because you only have one file on your desk - your own - and you make sure that nothing goes wrong.

The "professional indemnity" Furphy

Another common deception is the line "We have professional indemnity".

Think twice before you fall for that one. Clients cannot claim against "professional indemnity" policies. The name says it all - the policies "indemnify the professional". It is the lawyer/ conveyancer who is protected - not the client. You call that "protection"?

The only potential benefit for a client is that if the client successfully sues the lawyer for negligence and wins, the lawyer can't say he/she does not have the money to pay up. 

But what are the client's chances of suing the lawyer successfully?

The client must be able to prove lawyer negligence. In the real world, that is so hard to do that most clients accept losses of hundreds or even thousands rather than risk financial meltdown by taking the lawyer to court.

The there is the imbalance of power when suing lawyers. Clients can find themselves confronted by the financial muscle of the whole professional indemnity insurance system (which in the case of solicitors is run by the solicitors' trade association).

So don't get sucked into a false sense of comfort by the "professional indemnity" myth.

If you are not yet convinced, put it to the test. Ask a lawyer about how a client makes a claim against the lawyer's professional indemnity policy, and ask to see a copy of the claim form. Expect to be told that there is no such thing. You are then in a position to decide if the "protection" offered by "professional indemnity" is fact or fiction.

Genuine protection means avoiding problems, not fighting about them after they have happened. Avoiding problems revolves around knowing what is going on. When you do it yourself you know much more about your house and its sale than someone who has never even seen it.

Further information about trading real estate

This online version of our printed real estate brochure might be of further interest to you.

31 July 2008