Are my solicitors over charging me?

TAS2

Hi All,

Just hoping someone might be able to help me with this 

I'm looking to buy a new build property for £304,800 in London, off-plan and on the Help to Buy scheme for first time buyers. I was initially told by the developers that they would cover the solicitor fees of up to £1,500 which is great, however when I asked they didn't tell me about all the other fees below:

Legal Costs

Our Fees - £1450.00 (covered by developers)

Fees for Mortgage work - £250.00

Fees for HTB work - £150.00

VAT Thereon £370.00

Subtotal

2220.00

Below are the expected disbursement and extra charges 

Bank Transfer Fees x 3 (exchange, completion, SDLT) - £144.00

UK Identity Search per person - £78.00 

Property Searches (approx) - £240.00

SDLT Submission Fee - £120.00

Subtotal

£612.00

In addition the government will charge a Land Registry fee of £270

The developers solicitors will also charge a fee for drafting contract and lease documents and this is expected to be £300

Stamp duty - £240

Can someone please tell me if this sounds right? 

Thank you!

T

Slithery

Sounds about right to me.

AdrianC

All sounds fine... BUT... personally I'd pay the £1,500 myself and use a different solicitor.

There's a reason that developers cosy up to solicitors, and it's not your best interests.
The solicitor is the ONLY person in the whole purchase process that's on your side.
Their job is to scrutinise the vendor's paperwork, and help you ensure you're getting what you think you're getting.
Why would you use one that's best mates with the vendor?

There's been a thread here in the last few days where a new-build developer's "recommended" solicitor sort-of-forgot to mention that a big chunk of land wasn't part of the plot, and it's almost certainly access for a future phase of houses.

https://forums.moneysavingexpert.com/discussion/6294784/odd-boundary-help-linden-homes

If the vendor is not only pointing you towards their lad, but actively paying him...

dimbo61

Developer recommended Solicitor ?
OMG No conflict of interest there.
There are loads of posts about this very issue 

WorriedKirkels

Not sure about costs in the south but those costs are higher than all my solicitor fees / charges combined for both my sale (£300k) and purchase (£500k)! I’m in the North and I am using a reputable highly recommended high street solicitor (not a conveyancing warehouse or developer approved solicitor.)

MaryNB

My friends were warned not to use their developer's solicitor. They didn't listen, they liked the discount. Something came up as they were approaching exchange. It was some term that contradicted what the sales person told them. The solicitor told them not to bother challenging it. They're on the cusp of pulling out over it.

I'm not saying they could have successfully challenged it but I wouldn't be pleased if my solicitor was discouraging me from trying.

Did you get any other quotes? If so did they include all the relevant additional fees?

The base fee is a lot more than I paid, even accounting for the difference in property price (based my solicitors flat fee). However, I'm in the SW not London, and fees went up during the stamp duty holiday due to demand and I know the solicitors I used haven't reduced them again. And you generally pay extra for a new build and stuff like HTB. Still the total seems a lot to me. You need to get a few more quotes. 

Tiglet2

Legal Costs

Our Fees - £1450.00 (covered by developers)

Fees for Mortgage work - £250.00

Fees for HTB work - £150.00

VAT Thereon £370.00

Subtotal

2220.00

Below are the expected disbursement and extra charges 

Bank Transfer Fees x 3 (exchange, completion, SDLT) - £144.00

UK Identity Search per person - £78.00 

Property Searches (approx) - £240.00

SDLT Submission Fee - £120.00

Subtotal

£612.00

In addition the government will charge a Land Registry fee of £270

The developers solicitors will also charge a fee for drafting contract and lease documents and this is expected to be £300

Stamp duty - £240

The costs are on the high side.

Fees for mortgage work is high.  My firm would charge about £100.

HTB work is also high.  My firm charges £50.

The bank transfer fees are about right - my firm charges £45 per transfer.

How many people are buying the property and/or gifting funds for the purchase?  My firm charges £12 per person, so £78 seems hefty.

Property searches are about right - basic pack if you are getting a mortgage is Local Authority Search, Water & Drainage, Environmental and Chancel Repair.

The SDLT submission fee is high - my firm charges £45.

The Land Registry fee is correct.  The property is a new build and will be a transfer of part.  A new title will need to be created out of the original title.

Charging an extra £300 for the developers solicitor to draft the contract is also hefty, in fact I've not come across a developer charging a buyer before.

It would appear to me that the £1450 that the developer is paying on your behalf is nothing more than an incentive to get you to use their "recommended" solicitor, but you are not really saving anything because they are quoting hefty fees for everything else.

canaldumidi

It's on the high side but not massively.

Most of those fees will need to be paid whichever solicitor you use. Shopping around will get you cheaper prices for some of the fees (though some are fixed 3rd party costs), but then of course you'll have to pay the solicitor's own fee yourself.

But as others have said, that's worth doing rather than use the developer's solicitor who will not want to risk ongong referrals from the developer by raising issues on your behalf....

london21

Are you able to use the discount with another conveyancing company? If yes I will shop around and find another conveyancing company.

I prefer to avoid conflict of interest and use a neutral solicitor. 

I will compare prices for the best value and reasonable reviews. 

MaryNB

london21 said:

Are you able to use the discount with another conveyancing company? If yes I will shop around and find another conveyancing company.

I prefer to avoid conflict of interest and use a neutral solicitor. 

I will compare prices for the best value and reasonable reviews. 

The discount will only apply to the solicitor the developer has an agreement with. That's the reason the incentive is there. 

It's not worth is though. After the leasehold scandal people should be running a mile from using the developer's recommended solicitor. You should never use someone who has such a conflict of interest. The solicitor should be entirely on the side of the buyer and have no interest in the developer's side of things. The discount the OP is getting is worth 0.5% of the purchase. Conveyancing is too important to be taking a risk on it for such a tiny saving. 

TripleH

Agree with not using recommended solicitors.

We stopped a purchase because our solicitor was raising serious issues about the lease on the property and that they had doubts the 'promised' amendments would materialise. The agent was pushing for us to exchange and again the changes would be made.

Vast majority other buyers (to best of my knowledge) used the recommended conveyancer.