{"id":6439,"date":"2015-11-25T01:00:35","date_gmt":"2015-11-24T14:00:35","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=6439"},"modified":"2015-11-25T01:00:35","modified_gmt":"2015-11-24T14:00:35","slug":"why-1-in-5-property-transactions-are-currently-delayed-due-to-error","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/why-1-in-5-property-transactions-are-currently-delayed-due-to-error\/","title":{"rendered":"Why 1 in 5 property transactions are currently delayed due to error – Peter Maloney"},"content":{"rendered":"

 
\nDid you know that 1 in 5 property transactions are currently delayed due to error? I didn\u2019t and what\u2019s more, these errors can cause delays of up to 1 year. In today’s show we talk to the Chief Executive for GlobalX Legal Solutions, Peter Maloney<\/strong>.
\n <\/p>\n

Transcript:<\/h4>\n

Kevin<\/b>:\u00a0 I was staggered to read the other day that one in five property transactions are currently delayed due to an error. In some cases, these errors can cause delays of up to one year, causing a lot of unnecessary stress to consumers trying to buy or sell a property.
\nProperty transactions are one of the last major financial transactions to become digital. Most rely on two agents meeting face-to-face to exchange checks and other important documents. However, it is expected that 85% of settlements will move online by 2019.
\nThis is all due to the introduction of some e-conveyancing software at Property Exchange Australia. Brisbane-based GlobalX Legal Solutions is a major sponsor of this. They\u2019re pretty much at the heart of the change. I\u2019m talking now to the Chief Executive for GlobalX Legal Solutions, Peter Maloney.
\nPeter, thank you very much for your time.
\nPeter<\/b>:\u00a0 Good morning, Kevin. Thanks for having us on.
\nKevin<\/b>:\u00a0 Peter, what does this actually mean to the industry? Firstly, let\u2019s go back. I mentioned that there are about one in five property transactions currently delayed, and we talked about worse-case scenario of up to a year. What\u2019s the average delay?
\nPeter<\/b>:\u00a0 That\u2019s right. A recent study conducted by PricewaterhouseCoopers and PEXA revealed that approximately one in five property transactions were delayed. There\u2019s a whole range of reasons for why property transactions are delayed. There could be errors in documentation, there could be insufficient settlement funds, or either of those parties just may not be ready to settle on the predetermined date and time.
\nKevin<\/b>:\u00a0 But what is the average delay? What are you experiencing?
\nPeter<\/b>:\u00a0 On our side, because we\u2019re obviously one of the largest property settlement agents in Australia, normally, most failed settlements are resolved within the following week.
\nKevin<\/b>:\u00a0 Does it vary state to state?
\nPeter<\/b>:\u00a0 No. That would be the standard across the entire country.
\nKevin<\/b>:\u00a0 Tell me about the costs associated with these changes in converting it all across to an e-transaction.
\nPeter<\/b>:\u00a0 The costs are largely in the transition from paper-based conveyancing through to electronic conveyancing. The costs are largely borne by the practitioner, not so much the consumer. The costs involved are around the transaction costs for lodgment of documents with the land registry and lodgment of documents that will enable financial settlement to take place.
\nFor the practitioners \u2013 it\u2019s quite open and public information \u2013 the cost of a property settlement on a single title transfer is $106.
\nKevin<\/b>:\u00a0 Is this being supported by the practitioners? Are they encouraging this?
\nPeter<\/b>:\u00a0 Undoubtedly so, Kevin. We\u2019ve just wrapped up a series of workshops all around the country. They were attended by somewhere between 150 to 200 people in every state. The practitioners have moved past the requirement for the sales spin or the cycle of what is PEXA, and they\u2019re now firmly into the educative stage. Approximately 15% of all practitioners are already signed on, and I think as of the last count last month, there\u2019s been about $2 billion of property transactions already flowing through the PEXA platform.
\nKevin<\/b>:\u00a0 The system is already working, so why will it take until 2019 to get it fully introduced?
\nPeter<\/b>:\u00a0 Look. It is transitional. It does require all parties to a property transfer to be a subscriber of the PEXA platform. That\u2019s not only the solicitor acting on behalf of both the buyer and the solicitor acting on behalf of the seller, but it also requires the financial institution \u2013 so the incoming mortgagee and the outgoing mortgagee \u2013 to be subscribers of PEXA at the same time.
\nLike anything, this process is a network effect. It requires the adaptation of the system across the broad network, and that\u2019s just going to take a couple of years for it to take effect.
\nKevin<\/b>:\u00a0 When this does come into full effect, will both the paper and electronic conveyancing still be available?
\nPeter<\/b>:\u00a0 Yes, they will. That\u2019s probably the most important thing for all buyers and sellers to know. The way property is settled in Australia will continue to have a hybrid offering of both manual settlements processes, which is in place today, and the electronic processes.
\nIt\u2019s important also that some of the property settlements that occur don\u2019t fit the electronic model, so there are some exclusions under the electronic model that won\u2019t take effect.
\nKevin<\/b>:\u00a0 What about verification and identity checks? I guess, as always, the difficulty when you go online with any of these things is that you\u2019re exposing yourself to a lot of unscrupulous people.
\nPeter<\/b>:\u00a0 That\u2019s right, Kevin. Verification of identity is new to the process of conducting a property transfer, but it is also one of the greatest safeguards in the process.
\nFor property transactions that are conducted electronically, the practitioner must verify the identity of the buyer or the seller, depending on which party they\u2019re operating on behalf of, and that complements the pre-existing rules that exist in Queensland around verification of identity from the mortgagee perspective.
\nAround the country, what all land registries have been committed to doing and have successfully rolled out is the alignment between the requirements of the electronic conveyancing platform, and they\u2019ve made that retrospective for the paper process.
\nSo for the consumer, as opposed to having a different process for electronic and a different process for paper based, there\u2019s simply now one process that will require the consumer to have their identity verified prior to being able to transact in the property or to be able to facilitate a transaction electronically.
\nKevin<\/b>:\u00a0 Well, certainly a step in the right direction. Peter, thanks for coming on and telling us about that, and all the best for the future. Peter Maloney from GlobalX Legal Solutions.
\nThanks for your time, Peter.
\nPeter<\/b>:\u00a0 Great. Thank you, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

  Did you know that 1 in 5 property transactions are currently delayed due to error? I didn\u2019t and what\u2019s more, these errors can cause delays of up to 1 year. 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