Seller doesn't have a solicitor

Yorkie1

chappers wrote: »

yep don't see why the buyers solicitor couldn't make an undertaking to pay off the vendors mortgage

Conflict of interest for a start, I would imagine.

ValHaller

Yorkie1 wrote: »

Conflict of interest for a start, I would imagine.

There is no conflict of interest on this AFAICS. Doing it benefits neither party nor the solicitor at the expense of anyone else.

zzzLazyDaisy

I am surprised your solicitor said it is dangerous... but it will certainly be extra time and work, and if he is not short of work, he probably doesn't want the hassle. It is his choice, he is not under any obligation to act on your behalf.

Not many people do their own conveyancing - I don't and I am legally trained, but for the relatively small legal fees, I prefer to leave the faffing about to a solicitor. But handling the sale is not complicated at all. Yes, if there is a mortgage, that needs dealing with, but to be honest, someone dealing with their own conveyancing is more likely to have an un-mortgaged property, because the sellers solicitor also acts on behalf of the lender - so if the seller acts for himself, the lender will appoint their own solicitor to deal with the mortgage, and the seller will have to pay for that anyway, so there is probably very little saving on fees in that case.

What it does often mean, though, is that the buyer's solicitor has to be extra vigilant, as the seller is not covered by professional indemnity insurance, and is also not bound by the rules of the law society (put simply, if the seller lies through his teeth and then disappears with the money leaving you with a mess, you have little come back - a solicitor is unlikely to risk his career by done anything dishonest for a client as they risk being struck off). Also there is a bigger risk of the seller not being up to date with procedure, and the buyers solicitor having to re-draft documents etc.

So whichever solicitor you choose is probably going to charge you more because it is likely to be more work for them.

To be honest, I would think that if you pull out of the deal because of this, the seller will change his mind and appoint a solicitor rather than lose the sale - buyers are hard to find and solicitor's fees for a sale are really not that high (compared to estate agents fees, for example - did he market the house himself too?)

martinsurrey

ValHaller wrote: »

I don't see that this has to be a big deal. The buyer could effectively buy the property with seller's mortgage security in place and buyer's solicitor clears this with buyer's mortgage and deposit - effectively the same process as a remortgage.

Whether or not solicitors would actually do this, I don't know. Needs Richard Webster or someone else in the know to answer this.

But now the buyer’s solicitor is working for the vendor, increased costs, increased time, and he would need to do client due diligence, money laundering checks, etc etc, which I assume the vendor would have to pay for, and to pay for it he would need to sign a letter of engagement...

So the vendor would then have a solicitor, just it would be the same one as the buyer, sort of defeating the point.

astopy

Thanks zzzLazyDaisy, that's helpful. The seller is using an estate agent (the estate agent was trying to talk me into switching to their in-house solicitors...). I'm just going to tell them I'm pulling out unless he gets a solicitor and see what happens.

zzzLazyDaisy

martinsurrey wrote: »

But now the buyer’s solicitor is working for the vendor, increased costs, increased time, and he would need to do client due diligence, money laundering checks, etc etc, which I assume the vendor would have to pay for, and to pay for it he would need to sign a letter of engagement...

So the vendor would then have a solicitor, just it would be the same one as the buyer, sort of defeating the point.

The lender would appoint its own solicitor to act in that situation - think about it, they want to make sure they get their money back, and they are going to want to make sure they are legally represented in that process. They will bill their fees for this to the seller, along with any final fees on the mortgage etc. Normally the seller's solicitor also acts for the lender - the mortgage is paid off, and the seller gets any money left over. If there is no seller's solicitor, the lender will make sure its own interests are taken care of. So it is highly likely that there is no mortgage in this case.

Edit - money laundering checks only apply to the buyer - the solicitor has to check where the money has come from to ensure that it is a legitimate source.

But no doubt the buyer's solicitor would want to identify the seller to ensure that the money was paid over to the right person, and not a relative or tenant pretending to be the owner!

ValHaller

martinsurrey wrote: »

But now the buyer’s solicitor is working for the vendor, increased costs, increased time, and he would need to do client due diligence, money laundering checks, etc etc, which I assume the vendor would have to pay for, and to pay for it he would need to sign a letter of engagement...

So the vendor would then have a solicitor, just it would be the same one as the buyer, sort of defeating the point.

Buyer's solicitor is working for the buyer in all of this and none of the activities you specify are actually anything which the buyer could not contract (his solicitor) to undertake as part of the deal. Therefore there is no need for the vendor to actually engage the buyer's solicitor or sign a letter of engagement.

On the specific point of conflict of interest, you have not really raised anything.

ValHaller

zzzLazyDaisy wrote: »

What it does often mean, though, is that the buyer's solicitor has to be extra vigilant, as the seller is not covered by professional indemnity insurance, and is also not bound by the rules of the law society (put simply, if the seller lies through his teeth and then disappears with the money leaving you with a mess, you have little come back - a solicitor is unlikely to risk his career by done anything dishonest for a client as they risk being struck off).

While I do agree with the point about extra vigilance, I don't think there is much practical difference

• between a self representing vendor lying to the buyer's solicitor and a represented vendor telling those same lies to his own solicitor who passes those lies on to the buyer's solicitor in good faith.
• between a represented vendor attempting to engage his solicitor in a deception of the buyer and a self represented vendor attempting to engage the buyer's solicitor in the same deception

chappers

zzzLazyDaisy wrote: »

But no doubt the buyer's solicitor would want to identify the seller to ensure that the money was paid over to the right person, and not a relative or tenant pretending to be the owner!

It's all these extra checks and verifications that add time and money, in a normal transaction, the solicitor verifies that he is dealing with another bona fide lawyer and from that point knows he can trust stuff he recieves from that solicitor and doesn't have to keep verifying the provenance of everything he is sent by the vendor, as he would normally leave that up to the vendors solicitor.

Molly41

I swore that I would do my own house sale next time after the last debacle. I ended up running around getting necessary paperwork, making phone calls etc. In fact the person I thought was a solicitor was not but the process was so slow as to be ridiculous. They did have the courtesy not to charge me the full fees in recognition of all the work I had done. It did not seem a particularly difficult task!