Property Settlement / Conveyancing – Western Australia – Frequently Asked Questions

1. What is the difference between a settlement agent and a conveyancer?

In Western Australia – nothing. The two terms are interchangeable. They both refer to a professional who is qualified to handle the transfer and registration of land.

2. Do I need a lawyer or a settlement agent to transfer property in Western Australia?

If you are either buying or selling land in Western Australia, you should use a professional to assist with the process. In Western Australia the bulk of land transfers are handled by settlement agents. While many lawyers also do transfers of land, most transfers in Western Australia do not require a lawyer’s involvement.

3. How do I choose a settlement agent?

While price is an important consideration in any transaction, the purchase or sale of land is likely to be one of the largest financial transactions you undertake in your life. As a result, you need to make sure that whomever you choose will look after your interests and has the skill and experience to do so.

Firstly, you need to consider whether they are appropriately qualified and experienced for the job.

Next you should consider whether they can handle any issues that come up, or whether there might be some aspects of your transaction that may differ from the average transfer.

Finally, you should think about whether they will be able to work with you throughout the entire process, and whether they will be there to answer any questions you may have.

If you want to ensure your transaction goes as smoothly as possible, use the best settlement agent you can.

4. How much does it cost to buy/sell a property in Western Australia?

The costs of transferring a property in Western Australia vary wildly depending on the nature of the property and the sale process, whether you are buying or selling, and whether there are any issues in completing settlement. Settlement costs generally range between $1,000 and $2,000 plus GST and disbursements – but they can range up to $5,000 or more for particularly large or complex matters.

5. What are typical costs involved at settlement when selling a property?

The costs involved in settlement in Western Australia vary between properties, but the normal costs involved in a settlement and which need to be allowed for include the following:

1. Agent’s Selling Fee
2. Transfer (Stamp) Duty
3. Marketing costs
4. Payout any mortgage
5. Local Government rates
6. Utility rates (generally water)
7. Land tax (if applicable)
8. Strata levies (if applicable)
9. Settlement disbursements:
   • Document searches
   • Landgate fees
   • PEXA fees
   • Discharge of mortgage fees
10. Settlement fee.

These can add thousands of dollars of costs on a settlement.

6. When do I need a settlement agent?

As a general rule, your Real Estate Agent will help with contract preparation, and a finance broker can help you secure finance. A lawyer can assist you with contracts, including seeking advice on them.

But once you have a fully executed and agreed contract, then you need to contact and engage a settlement agent. They can help you prepare for settlement and will do things like ensure the title is clear for transfer, liaise with your bank to prepare for mortgages, and can help with completion of pre-purchase inspections and the like to make sure your transaction goes through smoothly.

However, they are limited in what they can do to assist if there is a problem with your contract, and you end up in a dispute with the other party to your contract. At that point you may need a lawyer to assist. This is why it is often a good idea to use a settlement agent who also is a law firm.

7. What is title insurance and do I need it?

Title insurance is a form of insurance that protects you against defects in your ownership of the property you are purchasing. Unlike Mortgage Lenders Insurance (which is required where you have a limited deposit and is intended to protect the bank, not you) title insurance is to protect you.

Common issues it can compensate you for include unlawful building works, incorrect boundaries and encroachments, fraud or negligence on the conveyance, and incorrect zoning.

Like most insurance, you only need it when you need it – but if you do need it, it really helps to have it there.

8. What is an ATO Withholding Clearance?

The ATO requires that you complete a form prior to the sale of property in Australia so they know whether Capital Gains Tax must be withheld from the sale price. An online form can be completed which will ask whether you are a foreign resident, and whether your tax obligations are up to date.

You should apply for a clearance once you have a fully executed contract of sale.

Generally the ATO will issue a clearance certificate promptly after completion of the online application – however the process can take up to 28 days. If you do not complete and provide a clearance to your settlement agent, the purchaser will be obliged to withhold up to 15% of the funds from the sale as though you were a foreign resident.

You should also ensure that when you complete the form you include the correct contract date for the sale of your property so that the clearance covers the relevant time period.

9. What is VOI? Why do I need to do a Verification of Identity?

Sadly, fraud can be an issue in most financial transactions, and there are few bigger financial transactions for most people than the purchase of sale of a property. As a result, it is important to guard against fraud, and a critical part of that is to ensure that you are who you claim to be.

Because most transfers of land now are completed online, your settlement agent will need to confirm your identity – so they know you are the person named on the title or the contract. This generally requires you to produce primary identification documents like your birth certificate, passport, or drivers’ licence – just like when you apply for a bank account.

As well as doing this in person, you can sometimes do it at a Post Office, or even online – however these do generally come with a cost.

10. What is PEXA?

In our modern world more than 85% of all property transfers across Australia are performed online using PEXA (Property Exchange Australia).

PEXA is a publicly listed entity that created and operates an online platform to enable electronic transfers of property. It also facilitates both the lodgement of the transfer with the State land registries, and the financial transactions involved in the sale and purchase of land, including the payment to the seller, and the registration of loans and mortgages for the buyer.

Your settlement agent is required to be a PEXA user – which means they are authorised to use the PEXA portal. When a property is sold, a workspace is created in PEXA for that transaction. Each party can upload information to the workspace and confirm their readiness to proceed. Once all parties are ready, the transaction occurs essentially instantaneously, with the transfer registered on the title, and the financial aspects all processed electronically.

One of the documents you will be required to sign for your settlement agent will be a PEXA Client Authorisation form confirming your authority to transact on PEXA on your behalf.