For decades, real estate agents have not really worried much about conveyancing and settlement. It’s been the necessary but boring thing that happened after the thrill and excitement of negotiation and the sale of the property, and has always been someone else’s problem. But changing consumer expectations around service are significantly impacting that.
If you can order a pizza, or book a taxi, or a holiday home and have complete visibility of what is happening for a transaction that is under $100, surely you should be able to expect the same – if not better – when you have committed to spending $300,000, or $750,000 or more than $1m on the biggest transaction in your life?
There are some big changes currently happening in the conveyancing space with the introduction of digitised workflows, task automation, payment security and customer management systems that will have long-range effects on agents that are both far-reaching and positive.
Far from being dreary admin, they offer the real estate industry one of the biggest opportunities in decades to improve its image and reputation and lift its quality of service while also supporting a busier market. And all of this with very little effort. Here’s what’s going on:
It’s time to end the tears
Research by Allianz Australia in 2019 found that buying a home impacts the mental health of one in two Australians, with 55% saying that because of this stress, they’d rather stay in their current home longer.
In addition, according to a trend report by America’s National Association of Realtors, 38% of homebuyers under the age of 28 rate “understanding the process and steps” as the most challenging aspect of buying a home. That’s a worse score than the difficulty of “saving for the downpayment” and “getting a mortgage”. At Inman 2022, it was confirmed 1 in 2 people cry during the settlement process. As conveyancers with over three decades of experience, we can confirm that tears – and frustration – are also a regular occurrence for Australian property buyers and sellers.
So the stress, worry and lack of understanding around what happens when you buy or sell is both a factor in property market performance, discouraging many from entering, and delivers a more stressful experience than necessary for those who do participate.
Anything we can do in the industry to reduce stress and anxiety and deliver better experiences across the entire transaction delivers both reputational benefits and supports a more active property market. Buying a home shouldn’t be a mental health crisis. It should be one of the most exciting things our clients ever do! Digitising conveyancing is an important part of the process.
Improving how the game is played
If the traditional method of buying and selling a property was a football match, it would be like one of those AFL games that is hard to watch. The play is broken and patchy, full of dropped balls, stoppages, injuries and scraps over ball ownership resulting in shouts of ‘ref’! And like a football match, once we enter the fourth quarter of play, the stress and tension really ramps up.
Victory – or defeat – reflects on all the members of the team, and in real estate, agents, financial institutions, conveyancers, and government authorities need to recognise that we are all playing together to secure, close and settle deals. Whether we like our fellow team members or not, a bad performance by one reflects on everyone on the field and will upset the fans.
Many people don’t realise that the way conveyancing is practiced in Australia has undergone very little change over the past 150 years. It is slow and error-prone, with conveyancing taking an average of 42 days to complete nationally. Manual processes mean mistakes are easily made, and this slows everything down further.
The majority of proptech to date has focused on improving the performance of real estate agents, while fintech has focused on streamlining mortgage approvals. Imagine learning that key members of your team have been trained on ancient models while the rest of your team is using the latest 21st-century devices.
The current changes occurring to digitise conveyancing can reduce conveyancing times down to 20 days, significantly reduce the cost, and bring conveyancing practices into alignment with sales and financing. It delivers a faster game, fewer dropped balls and thrilling experiences that are a pleasure to be part of.
Delivering transparency, clarity and speed
One of the biggest issues around buying and selling currently is the lack of transparency that occurs once a property has been sold. What happens next? ‘That depends’ is not the answer most buyers want when we are talking seriously big money.
When unsure, buyers and sellers will contact their real estate agent. But with their involvement in the process now complete, most agents have moved on to the next deal. Regardless of how well you performed when selling and negotiating, post-sale service – or lack of it – is a significant contributor to the industry’s poor reputation that currently costs agents at least 30% of their clients becoming repeat business, according to ActivePipe. A home is not really sold or bought, though, until all parties have moved in and are hanging pictures or curtains, delighted at starting their new chapter.
Giving clients transparency and clarity is key to helping them feel secure and is a major contributor to reducing stress which, in turn, results in better customer experiences.
Transparency also delivers greater accountability to all of the parties in the transaction, informing what documentation is required at different stages and helping manage its assembly.
Agents shouldn’t need to be overly involved in settlement. You should be confident that you’re working in an environment that helps you support your seller and buyer to complete their sale easily and in a way that supports the great relationship you’ve had with them so far.
Digitised conveyancing practices have created easy-to-use and powerful apps that agents can share with their clients to give them transparency around the final stages of their transaction and help them keep on top of their last actions and handoffs to deliver amazing post-sale experiences for very little effort.
Creating a truly end-to-end and cheaper transaction
For property purchasing to become seamless and something that you could possibly do via your mobile phone, all parts of the transaction need to be digitised. To date, the focus of proptech and fintech has been on improving real estate sales and back office and mortgage assessments, while PEXA has delivered electronic lodgement networks for the final step of the financial exchange and lodgement with government departments.
In the middle sits conveyancing which has been an ever-increasing bottleneck until recently. The changes now being introduced to conveyancing are similar to those that real estate has embraced, including the use of CRMs to manage customers, workflow management, digital documents with electronic signing, automation and electronic handoffs replacing the emailing of sensitive information across the internet.
These changes not only improve the speed with which conveyancing can be done but also reduces the error rate, which in turn reduces conveyancer stress and the cost to the consumer. And who doesn’t love a cheaper rate?
Making transactions secure
Payment redirection – also known as man-in-the-middle scams – are increasingly common in real estate. In January 2022, an NSW family almost lost $1.1 million when transferring funds to a scammer’s account. In WA, a year earlier, one owner lost $133,000 after a scammer cloned their conveyancer’s email address and provided false bank details. The victims transferred their funds for settlement to the bogus account.
Under the current, non-automated, non-standardised process of conveyancing, issues regularly arise with the quality and accuracy of data, exposing conveyancing firms, real estate agents and clients to increased risk, particularly cyber risk. Sophisticated cyber-criminals exploit manual loopholes and weaknesses through email phishing, cyber fraud and other scams.
The security features of digitised conveyancing add layers of digital security to reduce the risk of fraud and the scamming of deposits and settlement funds and deliver transparency so both consumers and professionals can clearly see transaction progress. It also supports reduced anxiety around the transaction, which, when the dollars are this big, is considerable.
Letting you do you
One of the false promises of technology has been that it gives you time back – only to give you more things to do! But the digitisation of conveyancing isn’t about reducing the work to the point where anyone – especially an agent – could or should handle conveyancing. Instead, it recognises the special skills of conveyancers to identify and solve problems within contracts and settlements and makes them more efficient, cost-effective, secure and transparent and easy to integrate into the bigger property transaction picture as a whole.
This gives real estate agents peace of mind and security. You can be confident that if you’re working with a conveyancer who is embracing digitisation, they will easily integrate within your real estate workflows and systems, not give you or your team more to do.
It will, however, give your clients a better experience, help them move into their properties faster and more affordably, and do all of this within an environment that is cyber-secure and easy to understand. You negotiate and sell. We’ll handle the legals and settlement. Everyone does what they are best at, just more easily, and our clients are delighted. It’s wins all round.