Everything You Need To Know About Conveyancing Costs

Before embarking on a conveyancing transaction it’s important that you account for all of the conveyancing costs associated to the deal. This looks obvious yet it’s surprising how often clients will reach the point of completion only to realize they are short of funds simply because they haven’t budgeted adequately.

Legal Fees

Possibly the most obvious conveyancing costs will be the legal fees payable to your property solicitor. It is advisable to ensure you possess a good idea of just how much the final bill are going to be. As well as the basic legal fee you need to determine what disbursements, such as copies of land registry documents and bank transfer fees are payable. If your house is leasehold and you have been given a quote based on a freehold sale you could find that your conveyancer will charge additional conveyancing costs to cover the extra work. You should receive a breakdown of the conveyancer’s bill at the outset which should be pretty accurate, make sure you get this.

Landlord Fees

If you are selling a leasehold property your buyer will raise inquiries that need to be answered by the landlord. Most landlords charge a fee for providing this information. It is often the case that this cost will have to be paid up front. It is wise to set aside around £150-£300 to take care of the landlord’s charges.

Estate Agent’s Commission

The estate agent’s fee is probably going to be the largest of the costs (apart from redeeming your mortgage) and will be payable, usually by your solicitor on your behalf, from the sale proceeds, you can stipulate against this though. Estate Agency fees are normally charged as a percentage of the purchase price at around 1.5-2% (although if you use an online estate agent you can cut this considerably). If the sale prices changes during the transaction the estate agent’s fee will change accordingly and you need to account for this in your budget.

EPC

Before you market your property, you’ll need to have commissioned an EPC. Up until May 20th 2010 you would have been required to provide a full  home information pack (HIP) however, these have recently been scrapped by the new coalition government. You do not need to be in receipt of the EPC before being able to market the property. You should budget for £50-£70 for this item. Your estate agent or conveyancing solicitor will be able to organize one for you.

Mortgages

Obviously you’ll need to repay your mortgage from the sale proceeds on completion. This will include any early repayment charges which are applicable and any closing fees. These charges and fees won’t be shown on your annual mortgage statement so you should ask for a redemption statement when you decide to sell. Ensure that you keep paying your mortgage while the sale is proceeding. If you fail to do so then at worst, if the sale drags on unexpectedly, you risk repossession and at best you will become liable for penalty fees which will only add to your conveyancing costs.

Secured Loans & Charging Orders

If you have any loans secured on your property, whether by agreement or as a result of a creditor obtaining a charging order, you’ll need to incorporate these into your conveyancing costs as they’ll have to be repaid on completion. People sometimes secure loans on their property without realising it therefore at the start of the transaction you should ask your solicitor to check what debts are secured. Your solicitor may charge additional conveyancing costs for dealing with the redemption of any additional charges.

Services

Something people don’t always take into account in their conveyancing costs budget is the final bill for their services (i.e. gas, water ad electricity). On the day of completion you’ll need to read all your meters and contact the service providers to advise you are moving and to ask for a final bill. Don’t forget that if you take part in some kind of budgeting scheme where you pay a fixed amount throughout the year and you are currently in arrears, you may (unless you can take the account balance to your new property) have to settle the arrears in full.

Ground Rent & Service Charges

This only applies to you if you are selling a leasehold property. You will need to settle any arrears on ground rent & service charges on the completion of your sale. You should continue paying any charges up to exchange of contracts if you are able as late payment charges will only add to the final conveyancing costs. If you are not able to make a payment contact the landlords and let them know you are selling and will be settling the arrears from the sale proceeds, they may then be more lenient. If you do intend to make payments, make sure you speak to your conveyancer first. It may be better to pay it through him. This way he can certify to the purchaser that the payment has been made in the event a receipt isn’t received in time for completion.

On completion, if you made any payments which cover a period that goes beyond the date of completion, your solicitor should recover these from the buyer and deduct them from your conveyancing costs.

Removals

Something else to take into account when calculating the total cost of moving is the removal fees, if you are employing a removal company, as well as any storage costs if you need to store any of your belongings. Don’t leave any items in your property unless previously agreed with the buyer. If you do not do this you will leave yourself open to being pursued by the buyer for the costs of removing said items.

Fixtures & Fittings

If you have agreed with the buyer that he will pay an additional sum on top of the purchase price for fixtures & fittings then this will be sent to your solicitor along with the purchase monies and he will deduct it from the conveyancing costs.