What is Pexa?
TL:DR:. Pexa is an online settlement platform – it is quicker, easier and cheaper than a paper Settlement.
Traditionally, Settlements have been effected by way of a physical Settlement where all parties attend at Settlement and hand over documents and cheques. Organising a paper settlement is quite often difficult and time consuming – organising, generally, 4 parties to attend in a limited time frame (banks don’t like to settle before 2pm or after 4pm) can sometimes be a logistical headache. Then after all of that work someone arrives at settlement with a document containing an error or a cheque isn’t correct and Settlement has to be delayed hours/days.
In 2013, Queensland enacted the Electronic Conveyancing National Law (Queensland Act) which established the rules for the lodgement of land title transactions through an Electronic Lodgement Network.
Pexa is one such “Electronic Lodgement Network” – fancy words for a platform to conduct electronic settlements. Whilst there are other platforms, Pexa has quickly become the leading settlement option.
With Pexa, the land title documents (ie Release of Mortgage, Transfer & Mortgage) are prepared, verified, signed and lodged all electronically. Now, these documents are registered within minutes of Settlement – rather than 2-4 weeks after Settlement with physical documents. This is great news for a Buyer – their investment is now secured much quicker.
Sellers can also start their celebrations a little earlier with funds being deposited into their account within hours of settlement as clear funds – this is a huge change to having to wait 3-4 days for a bank cheque to clear.
Pexa charges a fee to use their platform (currently: $123.97). The cost to settle a physical transaction can depend on the location and funding requirements. If Settlement is delayed on a physical settlement there can also be extra fees for re-attendance and/or re-drawing of cheques as well as loan interest for a Seller or penalty interest for a Buyer. Pexa provides peace of mind on the fee upfront whereas with a physical settlement sometimes we can only estimate until the transaction has been completed.
Our preference is to settle by Pexa – we have found that the banks are far more responsive to settling on Pexa than with a physical settlement. This means there is a higher likelihood of Settlement being completed on the nominated Settlement Date and less risk of delays. We have found that most settlements happen on the scheduled date – we’ve even pulled together settlements where the bank has only accepted the booking on the date of settlement.
We are excited! From February 2023 – most transfers will now be mandated for electronic conveyancing.
