Conveyancing Quotes and Hidden Costs

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RESOURCES - Conveyancing:
Many conveyancing quotes are out to trick you, so be warned!
Because conveyancing has become such a competitive business, many firms employ tricks to make their quotes look cheaper than they actually are.
This is your guide to what costs should and should not be included in an online (and off-line) conveyancing quote. This information will stop you being ripped-off.
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Accurate Quotes Should Consist of Two Parts

Part #1 - The Conveyancing Solicitor's Basic Fee

This is the basic cost of the solicitor's time in processing your transaction. This can vary a lot between firms (a spread of £500 is not unusual).

This is because UK conveyancing solicitors charge in 1 of 3 ways:

  1. On a "fixed-fee" basis (very rare).
  2. On a scale that links their fee to the value of the property you're buying or selling (the most common).
  3. On a "per hour" basis (reasonably common).

Needless to say, option 3 should be avoided at all costs!

Part #2 - Disbursements

Disbursements are things a conveyancer has to pay other people for, on your behalf.

Really they should be roughly the same from one conveyancing quote to the next. They are after all, fixed charges and I'll list them all (along with what they should cost) a little later on.

Conveyancing Quotes that Try to Trick You

A little trick many conveyancing firms like to employ is to invent disbursements.

These firms take tasks and charges that should be covered by the conveyancing solicitors basic fee - call them disbursements (or hide them away in small print) and put a hefty price tag on them.

This does three things:

  1. It sneakily creates extra profit for the conveyancing firm.
  2. It gives you the impression that their basic fee for doing the work is lower than it really is.
  3. It turns what initially looks like a cheap conveyancing quote into something far more expensive.

You really need to look out for this - it's a trick being used all over the Internet and is the secret behind many of the ultra cheap deals you'll see.

Two Rules for Comparing Quotes Accurately

Rule #1 - Be wary of any quote that does not fully itemize all disbursements.

Here's an example of the type of thing to watch out for:

Now, this is a fictional example but as you can see, this quote just provides the bare minimum (just the solicitor's basic fee) and as a result, looks dirt-cheap.

Many companies quote in this way and make you have to look quite hard to find a link to the detailed cost breakdown of all disbursements.

Before you instruct them, make sure you find the disbursements and see the full extent of all the costs you'll be charged.

Rule #2 - Always scour the small print for hidden or unexpected additional charges.

I'll list the most common "extra charges" later on in this article. However, the point to take home is that an honest and up front conveyancing firm simply won't have any!

What Costs Should Be Accounted For Within Your Quote?

Here's a breakdown for when you are selling a property:

The Solicitor's Basic Fee (£300 - £1,200) + VAT

If you're selling a leasehold property you can expect to pay an extra £50 - £250 because it makes more work for the conveyancer.

A company that provides transparent quotes will ask you and adjust the quote accordingly.

Land Registry Office Copies (£4 - £8)

These are needed to confirm you as the registered titleholder.

Telegraphic Transfer Fee (£20 - £30) + VAT

This charge only applies if you have a mortgage with over £60,000 to redeem.

Amounts less than this can be redeemed using the "Bank Automated Clearing System" (BACS - which is free).


Conveyancing quote cost breakdown when buying a property:

The Solicitor's Basic Fee (£300 - £1,200) + VAT

If you are buying a leasehold property you can expect to pay an extra £50-£250 because it makes much more work for the conveyancer.

Land Registry Office Copies (£4 - £8)

These form part of the pre-completion searches (sometimes called "Priority Searches").

Just before completion, your conveyancing solicitor needs to check that the vendor is still the registered owner of the property you're buying.

Bankruptcy Search (£2 - £4)

These also form part of the pre-completion searches. If you're buying with a mortgage, your lender will want confirmation that you haven't recently gone bankrupt.

Local Authority Searches (£100 - £200)

The costs of these vary from Borough to Borough. A good conveyancing quote will get you specify the Borough and give you an exact figure.

Most conveyancing quotes don't do this. They just give you an approximate figure. Look for conveyancing quotes that ask you to provide the postcode of the property you're buying - these are usually more accurate.

Drainage Search (£30 - £40) + VAT

This is to check the property has connection to fresh and foul water sewers. The cost does vary a little between water companies.

Chancel Repair Liability Search (£10) + VAT

This is to check whether you are liable to pay a contribution to the upkeep of the local parish church.

Environmental Search (£30 - £35) + VAT

Checks for evidence of contamination on (and round) the land you're buying.

If contamination is found, you could end-up liable for the clean-up costs, even if you didn't cause the contamination.

A lot of conveyancing quotes are vague as to whether this is included so check with your conveyancing solicitor before you commit to using them.

Location Specific Local Searches (£40 - £250) + VAT

Checks for coal mining, limestone mining, Cheshire bring, China clay mining and tin mining may be required.

It's difficult to anticipate these at the time you get you online conveyancing quote so don't expect them to be included.

Do however check with your conveyancing firm as soon as possible.

As a rough rule of thumb, each additional search should cost no more than £45 - £70.

Land Registration Fee (£40 - £700)

This cost depends on the price of the property you're buying.

There is a set fee scale for the Land Registration Fee and any good quote should work this out for you.

The set scale is:

£0 - £50,000

£50,001 - £80,000

£80,001 - £100,000

£100,001 - £200,000

£200,001 - £500,000

£500,001 - £1,000,000

£1,000,001 upwards

£50

£80

£130

£200

£280

£550

£920

Telegraphic Transfer Fee (£20 - £30) + VAT

This is a fee charged by your bank. It's to cover the cost of them sending your money to the vendor's conveyancing solicitor.

Stamp Duty Land Tax (% of the property's value)

This is the Inland Revenue's slice of the cake. The current tax rates are as follows:


£125,000 - £250,000

£250,001 - £500,000

£500,001 - £1 million

£1 million - £2 million

£2 million +


1%

3%

4%

5%

7%

Your quote should automatically workout how much tax you'll have to pay. Some cheeky quotes don't include the stamp duty (and as such can look phenomenally cheap).

You will be paying tax, come what may, so make sure you take it in to account.

Look Out For Hidden Extras in Your Quote

Hidden extras can pop-up under disbursements or worse, in the small print so read you conveyancing quote carefully to avoid any nasty surprises.

Thing to lookout for include:

PI Contribution (£30 - £50) + VAT

"PI" stands for "Professional Indemnity" and it's a particularly odious little charge. Basically the firm is trying it on and it should already be included as part of the conveyancing solicitor's basic fee!

Don't use a firm that tries this trick with you. It's an overhead of their business and they have no right asking you to make a contribution.

Postage, Photocopying & Phone Calls (£5 - £50) + VAT

Again, these are overheads of business and have no place in your conveyancing quote.

International phone calls & postage maybe, but only if they are fully itemized!?

Filling Out the Stamp Duty Tax Return (£50) + VAT

Here's another favorite of the conveyancer that can't compete honestly in a modern marketplace.

In 2003 the tax form went from being a single page document to having seven pages. Many conveyancing solicitors took this opportunity to invent an extra disbursement.

This charge should not be itemized in a decent quote. It should already be accounted for within the solicitor's basic fee.

Dealing with your Lender (£100 - £150) + VAT

Another classic that often turns up in the small print of quotes (especially online ones).

It can also be found listed as a disbursement but a few firms are decent enough to come straight-out with it and declare that it's accounted for in the solicitor's basic fee.

Dealing with Leasehold Property (£50 - £250) + VAT

This is the same situation as above.

Ideally the quote will allow you to state if you're buying a Leasehold or Freehold property.

The conveyancing solicitor's basic fee should then automatically be adjusted accordingly.

Conveyancing Quotes - A Final Word

As we've seen, getting quotes from conveyancing solicitors can be a slippery business.

Always check the small print and always calculate the real total price when comparing one quote against another.

Often what at first looks like a cheap conveyancing quote can end-up being much more expensive.

Related Conveyancing Articles:

>> Conveyancing In The UK (typical sale)

>> Conveyancing In The UK (typical purchase)

>> Does Good Cheap Conveyancing Exist?

>> How To Compare House Conveyancing Services

>> Conveyancing Fees Explained

>> Conveyancing Solicitors - Making Complaints

>> What is Online Conveyancing?

>> Why DIY Conveyancing is a Bad Idea

>> Glossary of Conveyancing Terms

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