Solicitor increased fees after quote

Smith86

Hi All, hope someone can help!

We have recently bought a new build, first time buyers - due to complete this Friday.

Paid £12,500 deposit plus £6,800 gifted from the builder = Leaving a mortgage of £115.595.

Original quote from solicitor had fees of £2,269.00 inc stamp duty, searches, professional fees etc. However when the invoice arrived last week it was showing an increase of £575.00.

All the fees seem to add up, however when I called to ask where the missing figure was from, was told it was 'a short fall between the mortgage and what we have borrowed'. Has anyone else experienced this?

I did say to the lady we were never told we would owe another £575, obviously not budgeting for it. She seemed pretty snotty and said it is something we should know seems we are the ones getting the mortgage! Other than that she couldn't explain what the extra was for and why it's not in any documents/paperwork.

Does anyone have any idea? Thanks in advance

jackieblack

Smith86 wrote: »

Hi All, hope someone can help!

We have recently bought a new build, first time buyers - due to complete this Friday.

Paid £12,500 deposit plus £6,800 gifted from the builder = Leaving a mortgage of £115.595.

Original quote from solicitor had fees of £2,269.00 inc stamp duty, searches, professional fees etc. However when the invoice arrived last week it was showing an increase of £575.00.

All the fees seem to add up, however when I called to ask where the missing figure was from, was told it was 'a short fall between the mortgage and what we have borrowed'. Has anyone else experienced this?

I did say to the lady we were never told we would owe another £575, obviously not budgeting for it. She seemed pretty snotty and said it is something we should know seems we are the ones getting the mortgage! Other than that she couldn't explain what the extra was for and why it's not in any documents/paperwork.

Does anyone have any idea? Thanks in advance

It sounds to me like the amount the solicitor received from your lender is £575 short of the total amount you are borrowing.
Could this be an arrangement fee? Initial interest payment? Is there any kind of retention on your mortgage offer, eg for works that need to be done?

In your shoes I would:
A) not pay the £575 that is being queried until you have a satisfactory explanation. If you are being pressed to settle the bill, I would pay the amount that you were originally quoted and agree, but put in writing that you require clarification on the additional £575.
go back to the solicitor and ask for clarification on what the bolded bit above actually means. If they know of a reason why the lender would not be forwarding them the full amount before completion, I would expect them to confirm this with you before EoC.
C) check with your lender the exact amount that was sent to your solicitor. If this amount is different to the total amount you are borrowing, ask them for clarification on why.

Obviously this needs to be done asap as it needs sorting before Friday.

Smith86

jackieblack wrote: »

It sounds to me like the amount the solicitor received from your lender was £575 short of the total amount you were borrowing.
Could this have been an arrangement fee? Initial interest payment? Was there any kind of retention on your mortgage offer, for works that need to be done?

In your shoes I would:
A) not pay the £575 that is being queried until you have a satisfactory explanation
go back to the solicitor and ask for clarification on what the bolded bit above actually means
check with your lender the exact amount that was sent to your solicitor. If this amount was different to the total amount you are borrowing, ask them for clarification on why.

Hi, thanks for replying!

Nah we have paid the arrangement fee and it is not the initial interest either. There was no retention also.

Thanks I will contact the lender tomorrow, however I have a feeling the 115,595 is correct as all our paperwork states that. So we will be back to square one!

I have asked for clarification from the solicitor but all I get is "you should know, you are the one getting the mortgage". She seems to be very ignorant to the fact we've never bought a house!

Kynthia

Do you have a mortgage broker you can ask?

jackieblack

Smith86 wrote: »

Hi, thanks for replying!

Nah we have paid the arrangement fee and it is not the initial interest either. There was no retention also.

Thanks I will contact the lender tomorrow, however I have a feeling the 115,595 is correct as all our paperwork states that. So we will be back to square one!

I have asked for clarification from the solicitor but all I get is "you should know, you are the one getting the mortgage". She seems to be very ignorant to the fact we've never bought a house!

So £115,595 is the total amount you are borrowing? And the solicitor says that she only received £115,020?

As your solicitor doesn't sound very helpful (:cool:) you are going to have to check with the lender yourself tomorrow. (A more helpful solicitor would have queried this themselves if the amount received didn't agree with the amount stated on the mortgage offer/ they were expecting.)

Smith86

jackieblack wrote: »

So £115,595 is the total amount you are borrowing? And the solicitor says that she only received £115,020?

As your solicitor doesn't sound very helpful (:cool:) you are going to have to check with the lender yourself tomorrow. (A more helpful solicitor would have queried this themselves if the amount received didn't agree with the amount stated on the mortgage offer/ they were expecting.)

Ok thanks! Well the invoice they have sent states £116.425. Our mortgage is £115,595.00. When I explained the difference of £830 to the solicitor the difference minus the £575 is an engrossing fee.

I have been in touch with the broker who said the matter lies with the solicitor, so will try the lender tomorrow. Thanks for your help!

G_M

First of all, this does NOT sound like the solicitor has increased their fees. This money is not being charged by the solicitor. It is money th solicior needs in order to pay for your house on your behalf.

It is your responsibiliy to ensure that you provide your solicitor with the full purchase price, plus his fees and disbursements.

In this case, you seem to be providing that money from a combination of
* your savings
* gift from builder
* mortgage

Whilst the solicitor should provide you with an accurate figure of what he has received from the various sources and what he has spent/paid out, it is your responsibility to do your maths to ensure you can afford all the costs of the purchase.

If your maths do not match his statement, then you need to identify whether the difference is the solicitor's error, or yours.

If, as it sounds, the mortgage lender has sent the solicitor £575 less than you expected, you need to ask your lender why. It is not your solicitor's fault he has received less.

However, be aware that unless he has the fll aount he will be unable to Complete, your purchase will be delayed, and you may then incur extra costs from the seller for failing to Complete on time.

edit: I would add that property-buying always costs more than people expect. There are ll sorts of extra charges/fees/costs they did not know about or expect, and it is essential not to budget every penny you have since you then have no reserves or contingency money for the unexpected extras.

tyllwyd

It would be worth double checking that the purchase price and the amount gifted by the builder also match exactly with what you were expecting.

kingstreet

If it's an engrossment charge, it's the builder's solicitor's charge which is passed on to you. It represents the initial costs of a new property. Your solicitor would not be able to quote this at the outset as they would not know what it is, although an experienced newbuild solicitor with knowledge of the builder/site would probably have expected it.

Ask the builder to ask their solicitor.

chanz4

Have they taken the deposit you paid the builder off, also does the site have a mantinance charge

Yorkie1

kingstreet wrote: »

If it's an engrossment charge, it's the builder's solicitor's charge which is passed on to you. It represents the initial costs of a new property. Your solicitor would not be able to quote this at the outset as they would not know what it is, although an experienced newbuild solicitor with knowledge of the builder/site would probably have expected it.

Ask the builder to ask their solicitor.

+1.

I would have hoped that an experienced solicitor would also have alerted the buyer that a fee would, in principle, be payable even if unquantified at that point.

Any other solicitor chosen by the buyer would have to pass this cost on too, it's just that the buyer hasn't been aware of this particular outlay until this late stage.