What Does e-Conveyancing Mean for Small Business?
Technology has transformed large portions of everyday life into virtually paper-free realms. Newspapers have been replaced with websites, phone directories have given way to online directories, and even paper currency is becoming a rarity in favor of debit cards. Legal transactions have always been well-known for the huge amount of paperwork they have required in the past.
Property transfers were no exception. But all of this is changing in Australia. A new system of property transfers simplifies the conveyancing process and reduces not just the paperwork involved, but the time required to complete property transfers.
A new Infotrack e-conveyancing system, PEXA, will be adopted by all states and territories in Australia by 2015. PEXA stands for Property Exchange Australia, Ltd and is currently live in Victoria, Queensland, New South Wales, and Western Australia.
PEXA is a completely automated e-conveyancing platform that eliminates much of the paperwork involved in a property transfer. It also means that the buyers and sellers do not need to be physically present in the same location during the conveyancing. The arrival of PEXA brings with it convenience, but also some measure of anxiety for practitioners who need to adjust to the new system.
How will PEXA affect your small business? Well, if you’re a real estate practitioner working out of a small office, you are left with little other choice than to embrace the new system. Indeed, some paper-based transactions already require some form of e-conveyancing, and many practitioners assume that in the future they will be required to conduct all settlements online.
This will be convenient for their clients, certainly, but one concern is the cost of using the new system. The issue of who pays for the system and how much is a pressing concern for small practitioners, especially. They will be hit harder by added costs and are now waiting to find out more about the added expenses of the e-conveyancing system.
According to PEXA, however, the added efficiency of the process will actually result in cost savings for everyone involved. PEXA claims that conveyancing fees for buying or selling a property would be reduced to about $120 to $150 per transaction. The organization behind the platform also said that the system would be good for small practitioners because putting everyone on an even playing field will increase competition. In theory, they say, PEXA will eliminate the cost savings now enjoyed by big banks because they effectively pay for conveyancing fees in bulk. Instead, now everyone will pay the same amount per transaction.
By allowing smaller firms to “capture a greater share of the market” from large banks, PEXA is good for everyone. Further, a forecast from the organization stated “Smaller banks and non-bank financial institutions see e-conveyancing, standardised mortgage discharge authorities and e-mortgages – with the appropriate protocols agreed – as solutions to reduce the barriers to lending and increase competition for mortgages.”
In theory, the e-conveyancing system sounds like good news for everyone. But small practitioners will have to wait until the system is fully implemented in 2015 to find out for sure.