How Technology can Impact the Conveyancing Industry

Conveyancing is the legal process involved with buying and selling tangible property, such as residential real estate or land.

Conveyancing meaning might not exist for you yet, but might be because you're involved with that aspect or real estate or also because it only affects countries that are part of the British Commonwealth: the UK, Canada, Australia, New Zealand (etc.).

In this article, we will discuss the costs of conveyancing, the end-to-end process and how technology can help those involved.

Costs

For buyers, the average conveyancing fee on a freehold property is approximately £1,050. To avoid any confusion, a freehold property is just what it sounds like, a property "free" from any "hold" (read: liens / debt on the property).

For sellers, the average conveyancing fee for this type of home is approximately £1,000. These fees are based on a £230K home, the average UK property price, with 20% VAT already baked in.

That's straight forward enough...so let's move on to the process itself.

House Conveyancing Process

Conveyancing involves a number of different aspects, including:

• Working with multiple stakeholders – solicitors for respective parties to the transaction, real estate agents, surveyors, mortgage lenders and banks, sometimes leasehold managing agents and freehold landlords.
• Legal title investigation of the property, to ensure that the seller has the right to sell it, or even whether the property is unregistered.
• Advising the purchaser on the rights and obligations associated with the property, such as easements (right to pass across land belonging to someone else), drainage and water supply, who maintains the boundaries etc.
• Obtaining and considering searches from the local authority, water companies, and environmental consultants.
• Enquiry handling from the other party’s solicitors; ensuring that all the legal documentation is properly drawn up.
• Making sure that the right amount is paid to the right parties, and any mortgages are redeemed.
• Registering the transaction with HM Land Registry after it has completed

Let's now take a look at the conveyancing process, step by step...

Step-by-Step Process:

Conveyancing Process for Selling a Property -

1. Seller’s conveyancer is instructed to begin the process.
2. Seller’s conveyancer confirms instructions by letter, setting out the terms of business and fixed fee costs.
3. Seller’s conveyancer carries out proof of identity checks and sends out a “fittings and contents” form, and property information form(s) for completion. If the property is considered leasehold, additional information will be required.
4. Seller completes a “fittings and contents” form and property information form(s).
5. Seller’s conveyancer obtains title deeds from deeds holder, or official copies of the title register and any other documents required by The Land Registry, and details of the amount outstanding on any existing mortgage.
6. Seller’s conveyancer prepares the draft contract and supporting contract documentation and sends to the buyer’s conveyancer.Buyer’s conveyancer checks the contract, and supporting contract documentation, and raises pre-contract enquiries with the seller’s conveyancer.
7. Seller’s conveyancer and seller answer pre-contract enquiries.
8. Buyer’s conveyancer confirms they have acceptable results from their searches, are happy with the answers to pre-contract enquiries and are in receipt of a mortgage offer (if any).
9. Seller and buyer agree on a completion date, and contracts are formally “exchanged” - meaning both parties are legally committed to the transaction. Seller’s conveyancer will obtain a settlement figure to repay the outstanding amount on any existing mortgage, if applicable. Buyer’s conveyancer drafts a transfer deed and sends to the Seller’s conveyancer.
10. Seller’s conveyancer checks the transfer deed and sends to the seller for signature in readiness for completion.
11. On completion the seller must vacate the property at a time to be agreed and make arrangements to hand over the keys, usually through the estate agent. Buyer’s conveyancer will send the proceeds of sale to the seller’s conveyancer, and the seller’s conveyancer will arrange for the keys to be released to the buyer. 
12. The seller’s conveyancer sends the title deeds and transfer deed to the buyer’s conveyancer together with an undertaking to use the proceeds of sale to discharge any existing mortgage. The seller’s conveyancer then pays the estate agent (if one was used), repays the amount owing to the existing mortgage lender (if applicable) and takes payment for their conveyancing service costs.
13. Once all the payments have been made all the remaining money from the sale will be transferred to the seller, usually by bank transfer on the day of completion.

Conveyancing Process for Buying a Property -

1. Buyer makes an offer on the property, which is accepted by the seller.
2. Buyer’s conveyancer being informed about offer acceptance.
3. Buyer arranges a survey of the property, and makes an application for a mortgage (if required).
4. Buyer’s conveyancer confirms instructions by letter, setting out the terms of business and fixed fee costs.
5. Buyer’s conveyancer contacts the seller’s conveyancer to obtain the contract pack.
6. Buyers conveyancer checks the contract pack, raises pre-contract enquiries, carries out the necessary searches and obtains a copy of the mortgage offer.
7. Seller’s conveyancer and seller answer pre-contract enquiries and return these to buyer’s conveyancer.
8. Buyer’s conveyancer reviews and reports to the buyer on the contents of the contract pack, pre-contract enquiries, the result of the searches and mortgage offer. The buyer then considers this report and raises questions on anything that is unclear.
9. When the buyer is happy to proceed, arrangements are made for the deposit to be paid to the buyer’s conveyancer in preparation for the exchange contract exchange.
10. Seller and buyer agree on a completion date and contracts are formally “exchanged” - meaning both parties are legally committed to the transaction.
11. Buyer’s conveyancer prepares a draft transfer deed and completion information form and sends these to the seller’s conveyancer for completion.
12. Seller’s solicitor approves the draft transfer deed and a final copy is made. This may need to be signed by the buyer before being sent to the seller’s solicitor for signature by the seller in readiness for completion.
13. Buyer’s conveyancer prepares a completion statement, carries out pre-completion searches and applies for a mortgage loan if needed.
14. On completion, the seller vacates the property by the agreed time and buyer’s conveyancer sends the proceeds of sale to the seller’s conveyancer.
15. Seller’s conveyancer releases the keys to the estate agent (if one was used) and sends the title deeds and transfer deed to the buyer’s conveyancer, together with an undertaking to repay any existing mortgage.
16. Buyer’s conveyancer sends the stamp duty payable to HMRC, receives the title deeds, transfer deed along with proof that the seller has paid the outstanding mortgage on the property.
17. Buyer’s conveyancer registers the property in the name of the buyer at The Land Registry.
18. The buyer receives a copy of the registered title from The Land Registry. Any documents required by the mortgage lender to be retained by them are sent on by the Buyer’s solicitor.

Technology in Conveyancing

As you can see, conveyancing is quite an involved process, and there are many potential pitfalls that can cost you both time and money. Quite simply, it's probably worth outsourcing the hassle.

An interesting factor of this market is that while it's such a common issue, at least going by search volumes, technology has not yet touched this market in a meaningful way:

This is the result of some quick keyword research of the conveyancing market. What we can see here is 164,500 monthly search results, on average, for conveyancing terms, yet the "comp," or competition, for advertising on those keywords is pretty low.

Competition: The number of advertisers worldwide bidding on each keyword relative to all keywords across Google. In the "Competition" column, you can see whether the competition for a keyword idea is low, medium, or high." Generally, below 0.5 competition is considered "low", 0.5-0.8 is considered "medium" and 0.8+ is considered "high." Competition does not relate to the organic search results in Google, but it’s related to the number of advertisers bidding for that keyword. Google indicates it as ”high,” “medium,” and “low”.

The real estate broker world is relatively relationship oriented between agents and lawyers who handle the conveyancing. However, there is clear demand for conveyancing online, and not many players are attacking that demand.

The lack of online thought leadership around conveyancing is what we're looking to change. Our company is trying to make it easier for people to execute their conveyancing online, via a simple file send and we handle the rest with a proprietary case management software.

A case management software simply converts legal documents related to conveyancing into e-docs and manages the process flow from within a dashboard vs. email and PDFs. This removes many obstacles/challenges in conveyancing related to contract lifecycle management (CLM) and costs.

This is a great example of digital transformation. We have time-improving notifications built in for the team handling conveyancing documents on behalf of real estate agents.

We are quite akin to a "digital conveyancing solicitor" in that we can handle many more files than a lawyer not enabled by technology...home buyers/sellers just get in touch, send us their documents and we load it into the case management system.

Same goes for what we do with brokers if we're the outsourcing vendor. A great example of the power of digital transformation is our sister company's legal billing software, which reduced a client's invoice handling time from 46 days to less than one day on average, just through dashboards for data analysis, decision making and email notifications.

So yes, technology can help, but you need to do some digging to find high quality partners. If you'd rather work with a solicitor given you have an unusual conveyancing case, then that makes perfect sense, otherwise a tech-enabled partner might be more cost efficient.

For more information, please reach out to [email protected].