If you’re planning a house move, it is essential to factor in the extra costs. Alongside stamp duty, legal fees can be a significant addition to the cost of buying a property. But is there a way to cut these costs?
What is conveyancing?
Known as conveyancing, the legal process involved in a house sale is an 11-stage transfer of property from seller to buyer. Usually, a solicitor or licensed conveyancer will carry out the work.
A conveyancer’s tasks will include reviewing all the legal documents and undertaking the necessary local authority and environmental searches, such as checking for flood risks and planning permission.
The conveyancer will also check the contracts drawn up by the seller’s conveyancer, liaise with the mortgage lender to ensure all the necessary information has been provided, pay all the related fees and register you as the new owners of the property with the Land Registry.
Is DIY conveyancing an option?
If you’ve bought and sold a property before, the conveyancing process may seem like merely filling in a few forms – but in reality, there is much more to it.
Many buyers wonder if they can save on legal fees by carrying out their own conveyancing. While technically the answer is yes, there are several things to bear in mind as any mistakes in the necessary searches and formal enquiries will lead to big problems later on.
If you are taking out a mortgage, your lender will almost certainly insist that a solicitor is used.
According to the Land Registry: “If you do your own conveyancing and something goes wrong, then normally you’ll have no cover. If you use a professional conveyancer, you’ll be covered by their professional insurance. This is why the vast majority of land transactions are handled by professional conveyancers, like solicitors.”
How much could I save?
The price you pay for conveyancing will vary depending on factors including location, and whether some additional searches are required – because the property is close to a river, for example. Legal fees for leasehold properties are likely to be more.
However, costs can also vary from one solicitor to another, so it’s advisable to shop around and get quotes. Solicitors in England and Wales must now publish their conveyancing fees on their websites, making it is easy to compare costs.
The only money you save by doing your own conveyancing is the cost of your solicitors and the VAT on those fees. You will still need to pay stamp duty, pay for the searches and probably a building survey too.
Typically, solicitors’ fees for conveyancing are around £850 to £1,000, which is a small proportion of the overall buying and selling costs. So, you will not save a large amount of money by doing it yourself and you would be personally liable for any mistakes.
When should you avoid DIY conveyancing?
DIY conveyancing should only be considered for selling/buying a freehold registered house, and then only if you are comfortable with legal jargon and willing to deal with a lot of paperwork. If a mortgage is involved, DIY conveyancing will not be possible as your mortgage lender will require you to use a solicitor.
Even if you do not have a mortgage and you are happy with the risks, there are instances where the law becomes very complicated and DIY conveyancing should be avoided. These are:
- If the property is leasehold
- If the property is not registered with the Land Registry
- If the property is not a house or flat
- If the sellers are divorcing or separating
What are the risks for DIY conveyancing?
While it is possible to do your own conveyancing, it takes a large amount of time and effort and comes with significant risks.
- You are at risk of buying a non-saleable property or a property that cannot be registered after completion.
- Your lack of knowledge may result in increased costs for instance, if you carry out unnecessary or wrong searches.
- You may misinterpret search results, which can then cause an array of complications potentially causing the purchase to fall through unnecessarily
- Without a full understanding of your legal obligations, your buyer might be able to convince you to reduce your sale price.
- You will not have negligence insurance and so will be personally liable for any mistakes.
What should I look for when choosing a solicitor?
Given the risks, most people decide to use a qualified conveyancer to ensure that the correct steps are taken and the purchase is legally binding.
When choosing a solicitor, it is essential to look at more than cost alone. The Law Society advises checking the solicitor is part of its Conveyancing Quality Scheme – the recognised quality mark for legal experts in buying or selling property. Scheme members are assessed annually, and you should expect them to clearly explain the steps in buying or selling a home and be transparent about their services and the costs. They should also keep you well informed through the process.
It is also worth checking whether your solicitor is registered with the specialist property law regulator, the Council for Licensed Conveyancers (CLC)
If you are unsure, asking friends or colleagues who have bought and sold in the area for personal recommendations is a good idea too.
What about online services?
If you search the internet for a conveyancing solicitor, you will probably find numerous online services, which may seem very affordable. While it is possible to use them successfully, similar warnings apply as with the DIY approach. You will need to comfortable with the lack of personal contact. You may only be able to interact with the solicitor online or through a call centre, rather than having a dedicated lawyer working on your case, and they are unlikely to have much local knowledge.
If you do go down this route, the Home Owners Alliance recommends carefully checking online reviews first, getting several conveyancing quotes and looking out for hidden costs that will push up the final bill.
Other ways to save
Your conveyancer may offer a “no sale, no legal fees” guarantee – useful if the worse happens and your transaction falls through. You will still have to pay the cost of completed searches, however. Make sure you are clear on this, and any other fees and charges, from the outset.
If you are taking out a mortgage, some lenders in England and Wales will cover your fees, provided you use their chosen conveyancing solicitor – others may offer you cashback instead.
Once you start looking for a property, it is a good idea to get organised, with important documents, such as information about home improvement works and gas and electrical certificates, ready at hand. This will speed up the process, making it painless and efficient, and possibly saving money too.
With the need to pay stamp duty, removals costs and other expenses it is tempting to try and save money on conveyancing. But this is a vital part of the buying process so it is important you feel comfortable with your solicitor; that they will do a competent job and keep you well informed at every stage.
Remember, if you are selling in Wimbledon, Richmond, Coombe and around, it is likely that your property’s rise in value will more than cover your selling costs.
To find out more about how much your home could be worth today, and about the stunning properties we have for sale, get in touch today.