05/12/2024
CONVEYANCING FEES -
Conveyancers face a growing tension that could make or break their businesses.
On the one hand, they help clients through one of their most significant financial decisions in a complex and highly regulated area of law.
However, multiple factors have created a trend of low fixed fees that do not realistically allow a Conveyancer to provide their client with a level of service the profession should be aiming for.
“Fixed fees as low as $880.00 for Sale or Purchases simply don’t allow Conveyancers to give their clients the level of diligence and attention they deserve,”
While there are many intricacies and market forces at play when it comes to this “race to the bottom”, There are three primary factors make current pricing models unsustainable:
*the inappropriate interventions of real estate agents,
*the exclusion of common events from fixed fee terms
*and the work being done by underqualified staff.
“Real estate agents’ primary aim is to finalize contracts swiftly,”
“In their haste, they frequently urge hurried signing, insert potentially harmful special conditions, deter legal consultation and meddle in the conveyancing process post-agreement.”
Because, oddly, real estate agents so often control the contracting process, issues that could have been spotted and addressed before the contract was signed are ignored, leaving the consumer to deal with the fallout, according to Nadine.
Their Conveyancers at this point are bound to deal with the contract they signed, and unfortunately it is often too late to help.
As for fixed fee terms, “the reality is that to charge a minimal fixed fee for a conveyance you have to limit the scope of your work to the absolute bare minimum,”
Common events like extensions of time, negotiations on building and pest reports, or potential disputes about disclosures or particulars of the property are often well outside what the limited fixed fee service will deal with.
“So, what happens to those clients if an issue arises? As often as not the ultra-low-cost fixed fee firm simply sends the consumer away if they are faced with an issue falling outside their low fixed fee scope, because that kind of service isn’t within either their expertise or their fee structure.”
So where has this led? Unfortunately, to achieve a lower cost of service in order to try and sustain low fees, many Conveyancers utilise unqualified or underqualified staff to do the work.
However, to compete on price, many firms seem to have little choice but to participate in the race to the bottom with lower and lower fees, and less and less service offered.
Do these issues have real world impact? One example: a client who was contracted to buy a five-bedroom home later found out that the fifth bedroom was, in fact, a garage.
The original lawyer on a fixed-fee arrangement told the client they had no choice but to complete the purchase.
It’s time for Conveyancers to stand firm. Our fees need to reflect the time and expertise required to properly guide clients before they enter into a contract and then during the Cooling Off period. If we don’t, both the industry and our clients, the consumers, will continue to suffer.”
As the property law sector grapples with these challenges, it remains to be seen how firms will balance competitive pricing with the need to deliver a thorough, professional service. But one thing is clear: There are some Conveyancers not willing to compromise the integrity of their work in the name of undercutting the competition.
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