With Metro Settlements set to conduct their 100th electronic settlement this week on the PEXA platform, we thought it was timely to explain a few of the key differences with a traditional paper-based settlement compared to the new electronic settlements process.
You might be surprised to learn that property settlements in WA have until recently been completed entirely using a manual process.
Whilst EFTs, digital signatures and the internet have become the norm for many types of financial transactions, when buying or selling a property, settlement agents until recently still solely relied on a tried-and-tested paper-based way of settling.
PEXA or “Property Exchange Australia” is an online platform born in 2010 that enables property settlements to take place electronically. Electronic conveyancing on PEXA, or e-conveyancing, reduces the number of manual processes and the paperwork required with traditional conveyancing transactions.
Currently just over 6% of property transfers in WA are completed as electronic settlements. This figure is sure to rise as more conveyancers, solicitors and lenders come on board.
Paper vs Electronic Settlements
Both methods of settling property come with advantages and disadvantages. What might suit one buyer or seller’s situation and contract, may not suit another.
Metro Settlements will work with our clients to ensure that we choose the most efficient method of settlement for each individual case.
Additional bank cheque fees and special answer fees may also apply.The sale proceeds are directly deposited to the seller’s nominated bank account. Usually, cleared funds are available the same day of settlement, or within 24 hours.
Manual Paper Settlements
Electronic Settlements on PEXA
|The sale proceeds are paid to the seller by way of a bank cheque, which can take up to three business days to clear.||The sale proceeds are directly deposited to the seller’s nominated bank account. Usually, cleared funds are available the same day of settlement, or within 24 hours.|
|The Transfer of Land is lodged at Landgate within three business days of settlement, and can take days or even weeks for the transfer of ownership to be registered on the title.||Real-time document lodgement occurs, with buyer’s names registered on the title within minutes of settlement taking place. Lodgement Gap Cover is also automatically included for buyers and sellers settling on PEXA.|
|Document errors or signing discrepancies can cause settlements to be delayed or even called off at the last minute.||Fewer manual processes and pre-settlement lodgement verification checks minimise the risk of settlement being delayed or called off.|
|Metro Settlements does not charge an additional fee to attend a traditional paper settlement.||PEXA charges a fixed-fee of $112.64 for each buyer or seller for settlement to be completed electronically.|
It’s also important to note that not all settlements can be done electronically, even if all parties would prefer this method.
Deceased estates, mortgagee sales and dealings involving encumbrances such as memorials cannot be completed electronically.
Metro Settlements – at the forefront of e-Conveyancing in WA
Electronic Conveyancing is arguably the biggest change that the WA property industry has seen since the introduction of the Settlement Agents Act in 1981.
Metro Settlements is proud to have completed a significant number of electronic settlements on PEXA. Additionally, we also have been involved in many industry projects seeking to improve the experience of buyers, sellers and practitioners when transacting electronically.
Our involvement will help countless participants to experience more effective property settlements.
Metro Settlements has been one of the first agencies in WA to participate in the PEXA Projects pilot.
PEXA Projects have enabled us to serve our developer clients more efficiently with features such as removing the need to rekey information from our Settlements Plus software. We’re also able to view the status of all transactions within a subdivision to provide improved visibility and forecasting.
Feedback from our involvement in the pilot program has been submitted to PEXA to further advance the functionality of the platform.
A large proportion of settlement agencies in WA, including Metro Settlements, use a software program known as Setts Plus to manage their settlement workflow.
Metro Settlements Licensee, Katelyn has recently been involved in a working group which has been the integration of PEXA within the Setts Plus software. This integration and the feedback from the working group will benefit countless WA settlement agencies and their clients.
Where to from here?
We’re proud to be a part of the digital revolution and the settle-bration!
Metro Settlements is PEXA Certified and our conveyancers are all personally Electronic Conveyancing Accredited.
Metro Settlements will continue to educate and encourage our clients and other practitioners to choose the most effective option for their particular settlement.
Update – 6 June 2018:
The Metro Settlements team have now completed almost 300 PEXA settlements, which is far above the industry average!
As at May 2018, 20% of all eligible transfer transactions industry-wide are completed on PEXA. Comparatively, Metro Settlements settled 50% of our May transactions electronically.
Regulations have been passed that require all eligible transactions to be completed as electronic settlements. There is currently an exemption to this requirement, however this expires on 1 December 2018. From this date, it will be compulsory for certain settlements to be completed electronically.