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?
Conveyancing is the legal process of transferring legal ownership of a house from one person to another. There are two stages to the process, the first is the exchange of contracts where the sale becomes legally binding, and the second is the completion when title deeds are legally passed to the new owner.
As with any legal process, conveyancing has a lot of steps that need to be adhered to. This is why a solicitor or conveyancer typically undertakes the process. However, it is possible to do it yourself. In this article, we look at when DIY conveyancing could be an option.
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 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. DIY conveyancing will not be possible if a mortgage is involved, 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?
Before you commit to doing your own conveyancing, make sure you are fully aware of the risks.
- You will not have negligence insurance, and so if you make a mistake, you will be personally responsible. A qualified solicitor is much less likely to make a mistake, and if they do, it will be them, not you, who is liable for the associated costs. All solicitors have insurance to cover this eventuality.
- You may misinterpret search results which can cause an array of complications. For instance, you may end up buying an un-saleable property or a property that cannot be registered after completion.
- Your lack of knowledge may result in increased costs, such as carrying out the wrong search and having to pay the same fee twice.
- There is a lot of legal jargon and technical terms, so you may struggle to liaise with the other conveyancers in the chain without prior experience or qualifications in property law.
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?
Online conveyancing is very similar to using a local conveyancer, but the entire process will occur online or over the phone rather than face-to-face.
The main advantage of choosing an online conveyancer is that they tend to be cheaper. If you choose a reputable online conveyancer, the process can be just as quick (or sometimes quicker). You may also be able to log into the company’s website and check the progress of your sale.
There are downsides to online conveyancing. Online conveyancers, especially those at the cheaper end of the market, tend not to provide a dedicated qualified conveyancer as your point of contact. Instead, you will interact with various clerks or customer service representatives online or through a call centre.
When comparing quotes, beware of hidden fees. Many online conveyancing companies compete for business by offering very low headline fees but with many hidden extras. If the price looks too good to be true, it probably is.
If you do decide to go with an online conveyancer, make sure you do plenty of research. Search the firm’s name with “review” or “scam” to see what other previous customers have to say.
Other ways to save
Your conveyancer may offer a “no sale, no legal fees” guarantee – useful if the worst 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 legal fees, provided you use their chosen conveyancing solicitor – others may offer you cash back instead.
Once you start looking for a property, it is good 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 essential 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.