Conveyancing quote info for the unwary; price pitfalls
If it looks to good to be true, it probably is.
The advent of conveyancing comparison websites on the internet has seemingly pushed conveyancing prices into the ground compared to a decade ago with offers of £99 conveyancing services abounding. However, comparison sites are not regulated by the Solicitors Regulation Authority (SRA) or the Council of Licensed Conveyancers (CLC) who regulate the activities of authorised conveyancing firms in the UK. Given that many sites are totally unregulated, unsuprisingly quotes that various websites put out are simply not accurate to the point where if a law firm were handing the quote out then they would very likely attract attention from their regulators for willful misrepresentation.
If you are shopping around, then you need to know what you are looking at, otherwise your 'cheap' quote may actually be quite expensive when you get the bill at the end of the transaction. One thing I can state with certainty, if your quote is for £99 then you will pay a lot more than £99 to the firm when you have completed the transaction. It is therefore worth ensuring that you are comparing an honest and accurate conveyancing quote to one that may fall short of this standard.
The following is what you should see on a conveyancing quote
- The Legal Fee
- Most quotes will include a TT fee
- The only disbursement should be a set of Office Copy Entries.
- Additional "disbursements" other than this will be effectively be additions to the legal fee payable to the solicitors.
Disbursements will include
- Additional "disbursements" other than these will be effectively be additions to the legal fee payable to the solicitors.
Firms may list an additional fee for dealing with properties that are leasehold, shared ownership, new build, right to buy or generally anything incurring additional work . This is part of their legal fee.
You will first of all have a Legal Fee. This is (obviously) what the firm is planning to charge you for the work. If it's less than £400 then I would suggest reading the rest of the quote very, VERY closely, especially the "small print"! If you are only provided a Legal fee and your not quoted any disbursements then the quote is not even slightly accurate and you should disregard it.
I say this because there are ball park about 10 hours work in a conveyancing transaction. You can figure out generally how much it's going to cost a legal firm pretty easily, take what you think a conveyancer or Solicitor per hour, multiply it by a factor of 1.5 to account for the cost of the office, stationary etc and then come to a figure. That's the breakeven point at which a firm is covering it's costs, before making a profit. and the overhead costs (ie, the breakeven point for doing the work) of a very efficient firm is going to be around £ 300 with a relaticely inexperianced person doing the work. Do you think that £99 conveyancing is going to be altrustically done by the firm without making any money, or would you say hidden charges are going to appear? If it looks to good to be true...
Bank Transfer Fee (also known as a TT Fee)
Another thing to look at carefully is the Telegraphic Transfer Fee, also known as a bank transfer fee or CHAPs fee. This is charged for using the same day banking systems. The actual charge from the bank is generally about £4 per CHAP's but reputable firms will charge you a set fee (usually £30) to cover every CHAP's payment in the transaction and the time of their staff doing them. A tactic a few firms employ is to charge this fee per CHAP's payment sent or received. Off the top of my head I can think of half a dozen likely payments without trying particually hard on a Purchase that would add an additional £216 (£30 +VAT X6) to the bill.
SDLT Completion Fee
About ten years ago, there was a tax dodge widely employed to evade Stamp Duty Land Tax. In order to close this loophole, HMRC brought in a tax self assessment form called the SDLT form which you have to fill in on every purchase, regardless of if your liable for stamp duty or not. Your conveyancer can fill this in (they see more of them a day than you'll probably see in your lifetime) but would like to charge for their time doing it. If this is not quoted on a quote then either the conveyancer is going to do it for free, or expect you to do it without help, and then charge you an unspecified amount when you give up. Checking which is the case is advised if it's not a line item on your quote.
Conveyancers rarely mind prospective clients asking them questions, so if you are unsure about a quote you have had then ask them. If they make a commitment on the phone however, then I would suggest asking the person that you have spoken with to email you to confirm the important bits of the conversation via email to avoid later disputes.