Conveyancing Fees – The Essential Guide (2020) – Homeowners Hub (Conveyancing)

Conveyancing Fees – The Essential Guide (2020) Options for Selling My House Fast

Contents

What Are Conveyancing Fees?

Conveyancing fees are what get paid to a legal professional to manage the purchase or sale of a property.

In most cases, we would recommend you use a qualified conveyancer to properly manage the sales process.  You’ll also avoid potentially expensive mistakes.

Rarely is a ‘do it yourself’ approach recommendable.

The conveyancing fee is split into two parts:

  1. The actual tasks of dealing with all the legal aspects of the sale;
  2. The disbursements or third-party expenses involved during the sale.

If the sale comes with a number of complications, there may be extra conveyancing-related costs to bear in mind.

How Much Are Conveyancing Fees?

We’ve come across conveyancing fees as low as £500 and as high as £3,000, excluding disbursements.

With such huge variations, shopping around for the best conveyancer can seem confusing.

Ultimately, what you end up paying is often based on:

  • Whether you’re using a conveyancing solicitor or licenced conveyancer.  The latter is generally cheaper;
  • If you’re using an online conveyancer.  Although these firms generally charge less, they have been known to offer inferior service levels;
  • How expensive and where your house is.  Generally, buyers and sellers of larger properties in more affluent areas would pay more;
  • Where in the country the conveyancer is based.  Typically, the further north you go, the cheaper the fees are;
  • The complexity of the sale and if it forms part of a chain;
  • If you’re buying or selling a leasehold property.  The charges will be higher due to the extra checks required;
  • If you’re buying or selling a shared-ownership property, the conveyancer may bump up the fee to handle secured debts owed back from the sale, deal with the extra enquiries and other issues.  Similarly, if it’s purchase from the council (under Right to Buy), most conveyancers will want a higher fee;
  • Whether the deposit partially funded by the Help to Buy scheme or financial gift.  Here, the extra checks and legal processes will be chargeable;
  • If you’re buying or selling a new build, there may be extra investigations required (particularly the surrounding land) meaning the conveyancer charges more;
  • Whether this the sale is for cash.  In this scenario, the conveyancer would not need to deal with drawing down mortgage finance and should charge less.

How to Find the Best Value Conveyancer

As with any service, you’ll often pay for what you get.

Cheaper services often leave people disappointed with the ‘conveyancing by numbers’ approach and lack of attention.

Most conveyancers will charge a fixed fee, only due once the sale is complete.  But this doesn’t mean that you will get the best possible service.

Above all, remember to get the total costs (including disbursements) up-front and in writing.

Here are a handful of tips to help you find a good firm at a cost that won’t break the bank…

  • Make sure you shop around and get a good feel for the market;
  • Talk to friends and family;
  • Ask your mortgage broker, bank manager or Independent Financial Advisor (IFA);
  • Check out review sites like Trust Pilot, Feefoo, Reviews.co.uk and Google Reviews;
  • Speak to your estate agent or property buying company.  For instance, here at Property Solvers, we work with reasonably-priced conveyancing partners who we have worked with for nearly 2 decades.

If you’re still undecided, you can always get on the phone to talk to the firm directly.

Questions to Ask the Conveyancer

Some questions worth asking include:

  • Simply, how much will they charge?  Make sure you confirm the extra costs, known as disbursements.  For example, solicitors have to pay up-front for expenses such as Land Registry checks and searches;
  • Can they send over a full breakdown of both the fixed and variable fees?  Making they hide nothing and you read the small print;
  • Will the fee include VAT?
  • Will the fee will only be due upon completion (no sale, no fee)?  If the conveyancer insists on payment up-front (other than for disbursements), make sure this will be held in the firms’ ‘escrow’ or ‘client’ account.  Also check that you’ll get a refund should the sale collapse;
  • How long has the firm been established?
  • If your case is more complex, does the conveyancing firm have the necessary experience?
  • What’s the average time for the sale to exchange / complete?  Can they demonstrate how they’ve met these timescales in recent history?  Having a fast solicitor is crucial, especially if you’re selling to a ‘we buy any home’ type company like ourselves (we’ll pay your legal fees) or through an auction.  If you’re buying, make sure the conveyancer can work to specific deadlines;
  • Can they provide a deadline for exchange / completion for your sale?
  • Are they on the mortgage lenders approved panel?  If they are not, then you may end up paying extra (as the solicitor will have to partner with another legal representative that does);
  • It’s always worth checking that the firm you use is a member of the Law Society and the associated Law Society’s Conveyancing Quality Scheme.  You should also check the Solicitor’s Regulation Authority (SRA) website.  Conveyancers must be members of the Council for Licenced Conveyancers (CLC);
  • How will they communicate with you and keep you updated?  You don’t want automated responses all the time should demand someone to answer your questions whenever you need.  At the same time, be careful not to bug them too often so that it impedes them actually getting on with work;
  • In line with the Solicitor’s Regulation Authority guidelines, are their fees presented transparently?
  • What kind of case-tracking processes do they have in place?
  • Would they be able to offer any assistance out of hours (evenings and weekends)?
  • Will you have one point of contact who will deal with any issues they have?
  • Who will deal with your enquiries if your direct point of contact is absent (day off, on holiday etc.)?  How will they be briefed?
  • What kind of caseload do they currently have?  It’s best to avoid a firm that is super-busy so that your case doesn’t end up neglected;
  • Is all the essential case progression manageable from a distance? You don’t want a situation where you have to visit the conveyancer’s office unnecessarily;
  • Is the conveyancer office based?  We’ve noticed that conveyancers (usually solicitors) that are based between offices and attending court can be hard to get hold of;
  • With mortgage-funded purchases, will there be an extra charge to liaise with the lender and redeem the mortgage?  There shouldn’t be any extra charges as most people access mortgage finance;
  • Is the conveyancer willing to communicate to your estate agent throughout the sale?  The agent can then help chase things up where necessary;
  • If you’re selling a leasehold property, how much extra will they be charging?
  • What would happen if the sale was to fall through?  Although you’ll probably be liable for disbursements costs, the conveyancer may charge you ‘abortive’ costs;
  • How conveyancers receive their fee?  The seller usually pays from the proceeds of sale (alongside the estate agency fees).  The buyer’s conveyancer would usually send an invoice, due on completion;
  • Does the conveyancing firm have a complaints procedure in place?

Disbursements

The majority of the fee goes towards the conveyancer’s time/effort, but there are also extra costs known as ‘disbursements’.

These are the administrative costs or overheads necessary to process the house sale.

Most solicitors should charge you at cost (i.e. not make any profit).  However, you’ll probably need to pay for the disbursements up-front.

Below are the prominent ones.  We’ve also indicated whether the buyer, seller or both would be liable:

Anti-Money Laundering (AML) Checks

This consists of an online verification to confirm your identity (using certified identification that you’ll have to supply).

As it’s a requirement for our own checks here at the Property Solvers Quick Estate Agency, we usually pass this on to the conveyancers on your behalf (meaning that you don’t have to pay this cost).

Note that separate AML checks need to be done on every owner.

Title Register (Deed) / Plan

The Title Register (Deed) contains essential details of the property as well as confirming ownership, restrictions, notices and legal charges against the property.

The Title Plan is an outline sketch of the property, demarcating boundaries.

The conveyancer must download up-to-date official copies of these documents (known as ‘Office Copy Entries’).

Property Fraud Check

Sometimes, especially if a company is involved in the sale, it’s wise to check that it’s legitimate.

Alarm bells should ring if your conveyancer sees that there are previous convictions for fraud.

Bankruptcy Fraud Check

Similar to checking if the buyer/seller is a corporate entity, your conveyancer may suggest that you undertake bankruptcy checks to confirm that there’s nothing untoward.

We would suggest that the conveyancer undertakes both fraud and bankruptcy checks early in the process to avoid getting too deep into the sale.

Searches

Conveyancing searches are series of legal checks undertaken by the buyer’s conveyancer.

They tend to vary in price and will usually be grouped together.

HM Land Registration Fee (Transferring Ownership)

There’s a fee payable to HM Land Registry upon the property’s transfer from the seller to the buyer.

This is a variable cost based on the value of your property and whether it’s a new build.

Bank / Telegraphic Transfer (CHAPS) Fees

Prior to exchange of contracts, the buyer will need to transfer deposit funds (or the full purchase price of it’s a cash purchase).

To get this done in one go (rather than separate sums), there will usually be a CHAPS (Clearing House Automated Payment System) fee.

With mortgaged purchases, there will be further transfer fees for funds going from the lender to the solicitor’s accounts and then on to the seller’s account.

Pre-Completion Check

An OS1 search is undertaken which ensure the seller has and will not secure any charges against the property.

Share of Freehold Acquisitions

As most freehold interests are held in Limited companies, the conveyancer will have to work with the freeholder to add the buyer on to the Memorandum of Association and Articles of Association.

In addition, a new share certificate will need to be issued and submitted to Companies House.

Leasehold Disbursements

Alongside the standard legal fees and disbursements, there some extras that should be considered with the sale of a leasehold property.

Leasehold Sale Pack

The buyer’s conveyancer will need to request this from the freeholder and/or management company.

It will contain essential details regarding the lease including ground rent, service charges, management company information, annual accounts (for at least 3 years), sinking fund management documentation, details of pending works etc.

Note that separate leasehold sale packs will be required if the Ground Rent and Service Charges are collected by different companies.

Landlord Notice Fee

The freeholder will be notified that the ownership will be changing from one leaseholder to another alongside the registration of a charge (usually a mortgage) against the property.

Deed of Covenant

This is a legal agreement that establishes the relationship between the leaseholder and freehold management company.

It often requires a series of background checks and confirmations of what can and cannot be included in the agreement.

Landlord Engrossment Fee

The freeholder or landlord may charge to produce a fresh lease which the buyer will need to be paid for.

Certificate of Compliance

This certificate is required if there is a restriction in favour of the freeholder and/or the management company that prevents the buyer from registering as the new owner.

It essentially confirms that the buyer will be legally committed to the terms laid out in the lease (including any conditions or restrictions).

Note that it is the job of the freeholder / management company to issue the Certificate of Compliance to the Land Registry.  This will remove the restriction and the sale can proceed.

Notice of Transfer Fee

The freeholder and management company may want confirmation of the new leaseholder’s details to ensure that they know where to forward future payment requests.

Notice of Charge Fee

The freeholder may want confirmation of the mortgage or any other legal charges against the leasehold property.

‘Non-Standard’ Expenses

If the buyer’s conveyancer requires to undertake extra tasks that go beyond what’s normal when dealing with a leasehold sale, there may be extra charges.

Examples may include extra requests for income statements or sinking fund details, checking lease extensions, charging orders, compliance with rent charges, multiple titles, title defects and issues surrounding common facilities.

Extra Conveyancing-Related Costs

There may be a few additional costs that you may incur, particularly if the sale is more complex than standard.

In our experience, most conveyancers take it as a given that there will be complications.

Nonetheless, it’s worth making sure you have a good idea of what you’ll be paying from the start.

Delayed Completion

If the buyer or seller wishes to extend the period between exchange and completion, there may be an extra charge.

This is because conveyancers often like to finish cases off completely.  There may need further time to return to the case and deal with the completion.

Guarantor Involvement

The conveyancer may wish to charge extra if the buyer is using a guarantor mortgage.

The lender will the buyer’s conveyancer to provide various pieces of information in relation to the guarantor’s solvency.

Indemnity Insurance

If you’ve lost important documentation or there are unresolvable legal issues (often dating back decades), the buyer may insist that an indemnity insurance policy is in place.

Unregistered Property Fee

If the property is unregistered at HM Land Registry, extra conveyancing work will be required to prove or establish ownership.

Things may get complicated if it’s an inherited / probate property as you may need to get other departments or firms involved.

Defective Title

If the conveyancer discovers something is missing or intentionally omitted from the title, it will need to be ‘repaired’ (legally speaking) before proceeding with the sale.

Examples may include if there is no right of way or issues related to shared drainage, sewer or road access.

Acting for the Lender

There are some lenders that will only deal with certain conveyancing solicitors (usually the ones that have a minimum number of partners).

In these circumstances, conveyancers often work with other professionals.

In our experience, many conveyancers will absorb the extra costs themselves to keep your business.

Power of Attorney (PoA)

If either the buyer and seller is using another representative to move the sale forward, the conveyancers will charge extra to process the relevant paperwork before proceeding.

Statutory Declarations

Rare in most residential transactions, this will need to be produced if there’s a new legal obligation governing the property that is not in the deed.

The conveyancer will draft the legally-binding document to suit the particular circumstances.

Transferring Equity

There are rare occasions where sellers do not want the proceeds of sale direct into their bank account but to be used in some other form.

For example, they may own a second or buy-to-let and need to pay down the mortgage.  Others may want to fund a property or other asset held in trust.

As there are additional legal (and possibly tax-related) processes, the conveyancer may well charge more.

Trusts

Trusts are sometimes used to manage properties, often to preserve wealth over generations.

If a property is being sold from a trust, the conveyancer may have to liaise with a specialist solicitor to make sure everything is legally compliant.

Help to Buy Scheme

Due to extra checks and processes to follow under this government initiative, your solicitor may want to charge an additional fee.

Lifetime or Help to Buy ISA

If you’re claiming these funds to put towards the purchase of your property, the conveyancer may make a supplementary charge.

Gifted Deposit

This kind of financial assistance typically comes from the buyer’s friends and family.

In addition to the standard anti-money laundering checks, there’s a legal requirement to demonstrate that these funds are coming from a legitimate source.

Declaration of Solvency

If a property is sold under its market value, this document confirms that the seller was not insolvent.

The buyer will need to take out a separate indemnity insurance policy in such scenarios.

Right to Buy

If you buying a property that you live in from the council, there are specific processes to follow which will push the conveyancing fee upwards.

Retentions

Sometimes completion funds are held back – perhaps for refurbishment works to finish or an insurance claim to come through.

Such scenarios require extra paperwork to protect the held funds.

Restrictions

A restriction on the property’s deed limits the ability to engage in certain dispositions.

For example, there may be a restriction to sell or get a new mortgage against the property.

This process is undertaken using an RX1 form (and removed with an RX4 form) – for which you conveyancer may charge an extra fee.

Licence Agreements

There are times when the seller wishes to remain in the property after the point of completion.

A licence agreement protects the buyer until this point end.

It essentially grants the same rights to reside in the property as a tenancy agreement, but for a much shorter period.

Shared Ownership

If you are buying or selling a shared ownership property, many conveyancers may want to charge more.

There will be extra work in dealing with the other ‘owner’ and clearing any secured debts owed.

New Build Property

With new build sales (buying a property directly from the developer), it’s often wise for the conveyancer to make extra checks about the surrounding land alongside the finished product and warranties.

Many new build leasehold property owners have had serious nightmares with escalating ground rents and service charge obligations.

A good conveyancer will flag these issues with you from the start.  However, they may want charge more to engage in a deeper analysis of your case.

Properties with Sitting Tenants

If you’re selling a tenanted property, then the buyer’s conveyancer will want to verify all the necessary documentation including:

  • The Assured Shorthold Tenancy (AST) agreements;
  • Confirmation that the deposit has been correctly lodged at the appropriate custodial scheme (Deposit Protection ServiceTenancy Deposit Scheme or MyDeposits;
  • Confirming previous rental receipts (usually from banks statements);
  • Checking boiler, gas central heating and electric works.

Note that if the property is a House of Multiple Occupation (i.e. with multiple tenancy agreements), extra work may be required.

Building Regulation Enforcement Notice

Usually concerned with new build or recently refurbished/extended properties, the sale could come to a halt if it emerges that building regulations have not been complied with.

It will be down to the seller to resolve this issue but the buyer conveyancer’s may also charge extra due to the investigative work.

Complex Chain

If there are multiple sales in conjunction with one another, the conveyancer may charge more to cover the extra case management.

Dealing with Third-Party Solicitors

Only necessary if the house sale requires external consultation beyond the realms of conveyancing law.

Expedited Sale

If you’re in need of a speedier sale and need the conveyancer to fast-track your case, they may charge you extra.

Our personal thoughts are that it’s probably better to steer clear if you receive this kind of response to your initial quote.

However, for our own work in the fast house sale sector, we are willing to pay a supplementary conveyancing fee in return for this kind of service.  Note that we cover our client’s legal fees with these types of transaction.

Insurance Policies

If you need a quick sale and do not have time to wait for the searches, you can take out specific indemnity insurance policies to protect anything negative coming through.

Also, if you don’t have certain building regulation certificates (for the boiler or window installation for example), the mortgage lender may ask for an insurance policy.

Underpinning or Structural Matters

Similar to building regulation enforcement notice, if major structural issues come to pass during the sale both conveyancers would have to work to get the issue resolved.

Typically the seller’s conveyancer would ensure that the matter is dealt with and obtain a structural engineer or appropriate report from a professional.  The buyer’s conveyancer will then check through everything before continuing.

Contaminated Land Issue

This is a rare occurrence with residential property transactions, but some extra conveyancing work may be required if the land was previously contaminated.

Any new buyer will want to know that there are not going to be any issues down the line – especially when it comes to resale.

Bankruptcy Issue

If there are any bankruptcy or insolvency-related notices on the Title, these may have to be removed.

Dealing with Repossessions

If the seller needs assistance in dealing with any mortgage arrears, then extra conveyancing time may be required.

Much will depend on how much in default the seller is in, but the costs are likely to mount if the conveyancer needs to attend court to stop repossession.

Archiving Storage

Conveyancers are required to keep all documentation related to the sale on file for 6 years.  This is just in case any post-completion issues emerge.

There should be no extra charge for this, but it’s worth checking the initial quote.

Administrative Fees

You should not be getting charged for solicitor overheads such as photocopying, postal and courier costs.  Again, it’s worth checking the initial quote to make sure.

Professional Indemnity Costs

This is an insurance policy that all conveyancers must have in place.

Again, you should be charged for this and it’s worth questioning if you see it in the quote.

We’ve sometimes seen online conveyancers cheekily add this in, so it’s worth double-checking.

Abortive Costs

It’s work checking what costs you will have to pay should the sale fall through or you pull out.

Some may ask for any disbursement costs incurred (which we think is fair).  Others may also want payment for the time they have spent working on your case.

You may wish to take out a Residential Abortive Transaction Insurance (RATI) policy.  You can claim back on a range of incurred costs including disbursements and conveyancing service charges as well as survey / valuation report, mortgage arrangement fees and other transactional costs.

When buying, don’t forget to add in the survey costs, stamp duty, estate agency fees, mortgage / broker fees + moving costs