Legal professionals are divided over the settlement period for property transactions despite great strides made in modernising the process.
With the advancements in digital contracts, digital signing, and electronic settlements, 33% of Australian conveyancers and lawyers believe that the traditional six-week settlement period is too long, a national survey into settlement sentiment conducted by InfoTrack found.
However, 39% of respondents wanted to continue with the traditional timeframe, while almost half said that a three- to four-week settlement period is more realistic.
Furthermore, while 52% said that they would migrate to a fully online conveyancing and settlement process, 39% said they prefer a system that integrates online and offline processes, and 9% said they do not want an online system at all.
“We know there are pockets of resistance to innovative technologies reshaping the conveyancing sector, so we believe that it is critical that clients have the option to settle manually or online for as long as it takes for them to feel comfortable transitioning to a fully digital process,” said John Ahern, InfoTrack chief executive.
This is why even though electronic conveyancing “is the way of the future,” InfoTrack retains support for manual settlements to give legal professionals the option to adopt new technologies at their own pace, Ahern said.
Eighty percent of the respondents identified an internet or system shutdown as the biggest risk in migrating to a fully online system. This was followed by control loss (28%), new system set-up and maintenance costs (26%), business partner relationship impacts (20%), and being unsure of how it would work (11%). Nonetheless, the concerns would not stop 54% of respondents from using a fully online system, the survey found.
The survey also found that 38% of respondents see a national online settlement system giving mortgage providers an edge. Twenty-five percent said it doesn’t, while 37% were undecided. Asked whether the Sydney and Melbourne markets are starting to cool, 39% agreed, 25% disagreed, and 36% were unsure.
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