When buying or selling a property, you’re likely to investigate your options when it comes to selecting a settlement agent or conveyancing lawyer to settle your property. Cost is a huge consideration for many people and can often be a deciding factor. However understanding what you are actually paying for and trying to compare quotes can be confusing.
We’ve outlined the various fees associated with a property settlement in Perth and across WA to help you better make an informed decision.
Professional settlement fee
The settlement fee is the amount you pay your settlement agent or conveyancing lawyer for their services. This fee will cover their time and expertise to prepare the necessary documentation, conduct searches and enquiries on your behalf and attend settlement for you.
The fee is usually more for buying a property than for selling due to the extra work involved. This fee is applicable for both selling and buying property.
Learn more: What does a settlement agent do?
Office and administrative costs
Settlement agents and conveyancing lawyers generally charge a fee to cover their office costs when completing your settlement such as standard postage, photocopies, telephone calls, faxes, printing and filing fees. Express postage and couriers are usually not included and will be charged to you if they are required.
Commonly these costs are built into the professional settlement fee, although some firms may charge it as an additional fixed fee or on a per-item basis. These costs are applicable for both selling and buying property.
Transfer duty, previously known as stamp duty, is a compulsory tax levied by the WA State Government on all buyers. The fee is dependent on the value and use of the property. This fee is only applicable when buying a property.
A title search is conducted through Landgate for the buyer to show the relevant interests and encumbrances relating to the property. Landgate charge a search fee for each document searched. The title search is essential as part of a settlement to ensure that a clear title is being passed. In many cases, multiple title searches will be necessary. This fee is applicable for both selling and buying property.
Transfer of land registration
Landgate charge fees to change the records of the property and update them to show the new legal owner as well as mortgage information. The fees are based on the purchase price of the property. This fee is only applicable when buying a property.
Local authority enquiry fees
To change ownership of the property, the local council (or shire), Water Corporation and State Revenue Department must be informed. A fee is charged by each authority to complete the search and change the name on their records. This is to ensure the outstanding council rates, land tax and water rates can be determined and are paid as part of settlement and not passed on to a new owner. This fee is only applicable when buying a property.
A bank cheque is required for most settlements in Western Australia. The fee is fixed regardless of the amount the cheque is drawn for and is applicable for both selling and buying property. Bank cheques are not required if using PEXA (see below for more information on PEXA).
Section 43 certificate
You will only be required to pay the fees associated with obtaining a section 43 Certificate if there is a strata company involved and the strata fees need to be adjusted between both parties. This is only applicable when buying a property.
PEXA is a secure online platform that allows property settlement transactions to be completed electronically.
A number of factors affect PEXA eligibility, however the vast majority of settlements can be settled electronically, a much faster and safer process. Another benefit to using PEXA is you will not have to pay bank cheque fees and title search fees will be reduced. The PEXA fee is applicable for both selling and buying property.
If your settlement cannot be settled using PEXA, you should not be charged the PEXA fee. Make sure your quote is adjusted correctly regarding PEXA.
Learn more about PEXA and e-conveyancing.
Extra or ‘hidden’ fees
Property settlements can require additional work which was not foreseeable at the outset or due to issues that unexpectedly arise. Make sure you understand all aspects of the property you are buying or selling so you can anticipate potential complications and any additional costs you may have to pay.
Additional fees can be associated with:
- Private purchases or sales
- Lost titles or applications for titles of subdivided properties
- Power of attorney
- Sales involving property seizure and sales orders
- Deceased estate properties
- Overseas buyers or sellers
- Contracts including special clauses (including GST clauses) or caveats
- Change of name
- Transfer of land to another party
- Purchases involving trusts, superannuation funds or corporations
- Legal advice
- Verification of identity
- Home visits or extended office visits
Don’t forget: Check whether your quote is inclusive or exclusive GST, this can make a significant difference when making your comparisons and choosing your Settlement Agent or Conveyancing Lawyer.