- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
Conveyancing Lawyers – What They Do For Buyers And Sellers
In a lot of cases, first time property buyers are not even aware that lawyers are involved in a property transaction.
They only find out that they need to engage the services of a property conveyancing lawyer after making a purchase.
So what does a conveyancing lawyer actually do for you?
When you make an offer to purchase a property and the seller accepts your offer, you will be presented with the option to purchase (OTP) by the seller.
This document can contain a lot of terminology and jargon that you are not able to understand.
The first key role of your lawyer is to explain the terms stated in the OTP. He will explain the seller’s terms to you and clarify any questions you might have on the agreement.
This can be confusing especially for new buyers and your conveyancing lawyer should be able to explain the differences in detail to you.
There are important implications and consequences for this decision and the clarity of how your lawyer explains this to you in a simple language which you can understand is crucial for you to make the decision.
Nobody would want to pay for a property and find out later that he cannot legally own the property. It is the lawyer’s job to make sure that there are clauses in the OTP that allows you to get out of the agreement should certain circumstances arise.
One example is that foreigners have to seek approval from the authorities to buy landed properties. Or the sale of your existing home fall through with the buyer failing to obtain financing, leaving you with insufficient fund to complete your own purchase. Sewage problems can also mean considerable repair costs that you have to bear.
In this instance, your lawyer can insist on a clause that the seller has to complete these repairs before handing over the property.
A seasoned lawyer should be able to advise you accordingly on the types of clauses that the OTP should contain for your best interest.
In ascertaining that all documents are proper and ready to go, your lawyer must then check the legal details of the property you are buying to make sure that all proper signatories have indeed agreed to sell the property and agreed to the sale.
If the property has joint owners, all parties must have signed the OTP. Individual searches are then conducted as part of due diligence to check the basic profiles of the sellers.
The mortgage you take up will then be sorted out.
An important area in the financing details is the CPF portion that will be used for buying the property. You will have to get in touch with CPF on the use of your CPF.
It is also at this time whereby your lawyer may explain how a charge on your property works, the payment schedule and how a conveyancing account functions.
It goes without saying that you have to exercise the OTP within the stipulated period or date stated clearly in the OTP.
Failure to do so will mean a breach of contract and the seller has the right to penalize the deal.
This implies that the seller has to right to sell the property to a different buyer and no longer legally obligated to sell it to you. He could also seize any deposit money that already been paid to him. In extreme cases, he might even take you to court.
Once exercised, your lawyer will send out information request to government bodies to check if the property will be affected by development plans in the coming years.
If not, you might have to forget about the purchase and work out a solution with the seller.
When the completion is done, the lawyer will send out the required notices to MCST (if requried) and IRAS.
Your lawyer prepares the necessary OTP taking instructions from you as guidance.
If there is an existing mortgage on the property, you will be informed of the penalty fees that you are liable for (if any).
This can include:
- Prepayment penalty fees
- Legal clawback fees
- Administrative charges
When buyer exercises the OTP, the required redemption notices are sent out to inform the bank on your request.
Notices will also be sent to CPF if necessary for discharge of the charge. They will then revert on the specific amounts that are payable.
If you have decided to pay your property agent’s commission from the sales proceeds, you have to give these instructions to the lawyer so that they can disburse the funds from the proceeds accordingly.
Notice has to be served to the tenants on the change of ownership.
If you are buying a property which includes furniture, electronics, and fittings, etc. You might want to consider drawing up a list of all items so that you can keep stock after taking over the property.
Let your lawyer know about the arrangements with the buyer so that he can advise you accordingly.
Which law firm to appoint?
There are many law firms around that does conveyancing work.
There are also those that have carved out a niche for themselves by specializing in conveyancing work.
The irony is that these law firms are all around us. Just that we failed to notice them when we are not buying and selling properties.
However, the prices that they charge for their services can vary widely.
The banks that you take up your mortgage with will usually recommend using their panel of law firms.
But since banks no longer offer subsidies on legal fees, you can easily find one yourself without having a preference to any one law firm.
In my opinion, conveyancing work are rather repetitive and it is seldom that lawyers will do something wrong with conveyancing.
With this in mind, your best choice might be the one that has the best price.