Electronic conveyancing is live across five Australian states. As of October 2018, 83% of lodgements in Victoria were completed electronically and 69% of all possible dealings in NSW were lodged electronically in November 2018. As for Western Australia, it transitioned all eligible transfers online from 1 December.
To date, over 2.2 million online property transactions have been completed by PEXA members with a settlement value of more than $326 billion. These digital settlements provide sellers with quick access to cleared funds, buyers can lodge documents transferring ownership electronically and what’s more, it is safer than the paper-based process.
Industry is now focused on enhancing the quality of interactions between parties transacting online. The following tips are designed to support you in streamlining this experience.
One | Follow the Transfer Guidelines
The Transfer Guidelines assist PEXA members in the timely and successful completion of PEXA settlements. They have been developed through industry-wide collaboration to meet the needs of all PEXA members.
An important guideline for practitioners who are acting for the purchaser is the provision of the Total Funds Required to Settle five business days before settlement.
This is the sum of the adjusted balance due to the Vendor (from Statement of Adjustments), all lodgement fees, stamp duty, the PEXA fee, and your professional fees (if payment is required at settlement). In other words, it’s the total amount payable by the purchaser.
Two | Refer to Bank Transfer Checklists
Some banks, including the major four, have posted a checklist of recommendations to guide practitioners through interdependent tasks in a workspace. They can be found on PEXA’s online Community forum.
Find out where and how to send a Discharge Authority (DA), how to contact the bank if you have an issue, special provisions for business lending, additional information to include in invitations, and further details regarding provision of shortfall funds and collection of surplus funds by mortgagees.
Three | Send invitations early
The Transfer Guidelines recommend that invitations to an Incoming Mortgagee and/or Mortgagee on Title be sent a minimum of ten days prior to settlement. Banks have indicated that they require at least ten days to complete all necessary internal processes.
The tasks that participants in a workspace are required to complete are tightly inter-reliant and dependent on timely and accurate completion for a successful settlement. When this doesn’t happen, the root cause is not always apparent. For example, what looks like a delayed signing of the Financial Settlement Schedule (FSS) by one party might have been caused by a late change to a financial line item by another.
Four | Have productive conversations
The PEXA conversation tool works most effectively when used exclusively to provide or request information that is not already available in a workspace.
Avoid using it to:
a) Inform other participants of tasks you’ve completed and are expecting them to complete;
b) Advise that the DA has been sent (use the checkbox and upload the DA into the ‘Files’ tab if applicable for the bank involved);
c) Inquire about the status of loan documents (refer to checkboxes);
d) Send unnecessary messages (for example, asking other participants how their day is going); and
e) Send messages to all participants when only relevant to some (this could compromise your client’s privacy).
Larger financial institutions can manage over 1,000 conversations per day. For every conversation, select a relevant predefined category to classify your message as this helps them to allocate messages to the right team and increase the speed of response.
Note: When inviting a bank to complete and lodge a nomination or consent of an electronic Certificate of Title (eCT) to a dealing in which the Bank is a third party (i.e. not discharging their mortgage), please invite them in the role of CT Controller (VIC) or Consentor (NSW) (i.e. not Mortgagee on Title) to avoid requests landing in the wrong queue. It’s also important to include the tasks you’d like them to complete and the nature of the transaction in the invitation notes.
Five | Verbally confirm bank details
It is recommended that you confirm all important information verbally with your clients, especially bank account details before entering them into the FSS.
A benefit to consumers of settling using PEXA is that vendors may receive quick access to cleared funds. The timing of receipt will vary between financial institutions. For example, funds from settlement can appear within minutes or in excess of 24 hours.