Beware the small print in cheap conveyancing prices
In the vein of the stark warning recently reported in The Sunday Times with regards to cheap energy deals there is a similar one in relation to conveyancing prices.
Home movers are warned to check carefully any conveyancing price that seems too good to be true, and indeed, any conveyancing price at all.
This is because of the fact that there are no regulations imposed on conveyancing businesses in general as to how they charge for conveyancing.
However, conveyancing solicitors do provide a stronger element of certainly to the extent that they are duty bound to separate out their own charges from those of third parties, but the distinction is often blurred and ignored.
For example, the following charges are often disguised as those payable to a third party when in fact they are pure profit to the conveyancer, and are separated out from their own stated charge to make it look smaller:
- Unregistered Title fee – cynically one might suggest that this is an admission that the conveyancers are not as expert in unregistered land, but either way, the fee only goes to the conveyancing firm.
- Mortgage discharge fee – not to be confused with a bank transfer fee which may be genuinely needed to repay a mortgage, some firms separate out a pure profit charge for their time in repaying your mortgage.
- SDLT form fee – this again is simply the conveyancers separating out the time it takes them to fill in the Stamp Duty return that has to be made during the purchase transaction. Again, cynically, one might as well have them separate out a charge for ‘letters sent on a Monday morning’. The separating out of tasks which form part and parcel of the lawyers normal work involved in the very thing they have already quoted for is moist peculiar and only leads to uncertainty as to what actual charge the lawyer is raising themselves compared to those they are genuinely paying to 3rd parties which cannot be avoided.
- Acting for the mortgage company on your purchase. Many firms treat this as part of a standard purchase.
- Professional Indemnity Insurance fee. All conveyancers must have this to operate so this is an overhead just like paper and electricity, but some conveyancers still collect a contribution.
- Postage and telephone calls. Again a pure overhead.
- Non-standard enquiries. Some firms may charge a fee for them having to make non-standard enquiries of the sellers. This is part of the conveyancer's job, to make enquiries on the papers.
- Searches fee. Some conveyancers may charge a fee for commissioning searches beyond the Local Authority search. Near universal practice is to commission 3 other searches anyway, so this will always be triggered.
- Quick completion fee. A fee may be charged if the gap between exchange of contracts and completion is less than an arbitrary amount of time. There are reports that some firms' websites state that they charge around £100 if that gap is in less than 3 weeks – when most gaps are 10-14 days anyway. So it will always be triggered!
So be smart when deciding on who you want to handle the legal work on your house sale or purchase and consider the following:
1. Always receive the quote in writing;
2. Always check for small print for the extra charges – like those mentioned above and any others;
3. Ask for a guarantee that there will be no extras added on;
4. Ask who will be your actual conveyancer. Demand the very same one person throughout and make sure they are legally qualified for the job e.g. a solicitor or legal executive.