Why is the seller entitled to appoint the conveyancing attorney when the buyer is responsible for paying him or her?
A simple way of answering this question would be to consider who is most at risk in a property transaction. This person is the seller because any of the costs that have to be paid by the purchaser are small when compared to the property’s value and so it is essential for the seller to maintain control until the transaction is completed.
In instances where the buyer takes up occupation of the property before the transfer has been completed, usually an occupational rent will be paid which is much lower than the bond repayments.
It could thus serve the interests of the buyer to delay the transfer of the property for as long as possible. However this is usually within a four-month period wherein afterwards the Receiver will charge a double transfer duty.
Generally, the real estate agent will recommend a conveyancer in the event of the seller not having his own attorney.
And while maybe the estate agents motives for appoint a specific conveyancer could come into question, they usually recommend one with a reputable reputation, a proven track record, is efficient in his or her work and thus able to speed up the transfer process.
Some buyers could favor conveyancers who offer their services at a reduced fee. Usually they offer this reduced fee if they are given the task of handling both the conveyancing and the bond registration assignments.
While this is a tempting offer, banks usually advise against it as the potential for fraudulent acts being committed, such as the price being loaded, is reduced.
In such cases, the buyer is able to get a bigger bond as a result of a fictional higher price being listed on the sale document. The buyer is thus able to pay less or pay the seller back in cash for any excess amounts.
The buyer may insist that his or her conveyancer be used, and so in order to ensure that the conveyancer represents the seller’s interests, a clause should be inserted into the agreement which stipulates that the seller nominates this conveyancer.
In conclusion, in order to avert any potential issues from arising it is best that both parties take necessary precautions in order to protect their interests.
Although much is made of protecting the seller's interests, in truth both the buyer and seller should make use of attorneys that seek to protect each party in the transaction.
A lot depends on the sale agreement and how it is worded. Contact us to make sure that your offer to purchase is worded to protect your interests.
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