Pulling out of purchase questions.

simon_or

saajan_12 said:

simon_or said:

Troy_af said:

TBG01 said:

What did your retainer, terms of business or whatever they call it say regarding abortive fees?

I'll have to have another read over the contract because it was so long ago, but I do remember it saying no sale no legal fee. However on the cost estimate invoice the "legal fee" is for around £600.. I take it this is probably the only amount I won't have to pay and I'll have to pay all other costs.

Aren't all conveyancers no sale no fee? That's always been the case with the ones I've engaged in the past. Given that more than a third of purchases in England fall through, it makes sense.

No, certainly not standard. Increasingly solicitors are offering it because it feels 'better' if you don't have to pay as much for a transaction that doesn't go through, and people don't really pay attention to how much that increases the base fee if it does go through. 

Whether 1% or 99% of purchases fall through, how does it 'make sense'? On average the fee you pay would be the same as the solicitors' time for a failed transaction is covered by pushing up the fee for successful transactions. However conveyancers have a somewhat defined amount of due dilligence they SHOULD do (depending on what they find) and it would be sensible to pay for them to do that properly, not incentivise them to take shortcuts, ignore issues and push the transaction through to get their fee. This is different to say estate agents, who have relatively fewer tasks they HAVE to get done beyond pictures, publishing ad and holding viewings. Beyond that, they might go the extra mile to publish a great ad, progress the sale post offer etc if incentivised with 'no sale no fee'. 

I note what you've said and accept that that's your opinion. However, to me it makes perfect sense to use a no completion no fee solicitor for a house purchase in England because of the many things that can go wrong between offer and completion and the high rate of transactions falling through. If only 1% of transactions fell through, then I wouldn't care as much either way.

I see what you're saying about solicitors' remuneration models and agree to a certain extent, but the fact is that conveyancing today is a highly commoditised business, and while you might want solicitors to charge more so they can do a better job, that's not what's happening unfortunately.

I can't speak for others but I personally got a very competitive quote through my broker and decent service from the conveyancer, so didn't pay anything extra for the no completion no fee feature. Plus, like the broker said above, it's too simplistic to merely see it as a cost for these conveyancers, it's like a promotion that reduces their customer acquisition costs so I'm sure has other compensatory benefits from a business point of view. It probably only makes financial sense for large firms.

I follow the same approach (minimising the risk of sunk costs) for other components of the transaction - adding lender product fee to the loan, using lenders offering free valuations, brokers that don't charge a fee or charge one only on completion, Estate Agents that don't charge a fee unless it completes, etc. I fully accept that you see solicitors differently, but frankly, in my experience buying and selling, I don't.

simon_or

newsgroupmonkey_ said:

simon_or said:

canaldumidi said:

simon_or said:

Troy_af said:

TBG01 said:

What did your retainer, terms of business or whatever they call it say regarding abortive fees?

I'll have to have another read over the contract because it was so long ago, but I do remember it saying no sale no legal fee. However on the cost estimate invoice the "legal fee" is for around £600.. I take it this is probably the only amount I won't have to pay and I'll have to pay all other costs.

Aren't all conveyancers no sale no fee? That's always been the case with the ones I've engaged in the past. Given that more than a third of purchases in England fall through, it makes sense.

No, it's not standard policy though some conveyancers offer this.

It might make sense for a client (assuming it's not more expesive) but not for the conveyancer since, as you say, 1/3 of all their work would go unpaid...!

Thanks, that's good to know. Must watch out to make sure that I only use the no completion no fee ones.

As for the sunk effort, that's just par for the course for the industry they're in, just like all the unpaid work done by the estate agent, mortgage broker, bank, etc when a transaction falls through before completion.

Just as a piece of advice, work out the costs first and whether you're prepared to take the risk.

As an example, we got some "no sale, no fee" quotes, but every one of them was twice as much as we're paying. They're putting their risk back onto you. We're doing buy and sell at £350k for £1824 all in, £1290 of which are legal fees.

As an example, one no-sale-no-fee conveyancer quoted £200 each way (buy and sell) for dealing with the mortgage alone on top of their fees.

I think they came out at around £3400 all in.

That's interesting because that wasnt my experience at all. My transactions were comparable to yours (more expensive on the purchase) but my legal fees was only about £50 or so more than yours. And overall cheaper as the disbursements seem like they were lower than yours.

Troy_af

Having dug out the invoice, it looks like I will be paying around £1,000, original amount was closer to £2,000.

Another quick question. Would there be any reason why it would not be a good idea to change solicitors for my next purchase even though I am still using the same for my sale? So I would have different solicitors dealing with sale and onward purchase. Current solicitors are too slow, their words not mine that they are short staffed. Given my situation, I would rather try my luck elsewhere and go with a solicitor that I know to be quicker.

Thanks.

user1977

If you're selling and purchasing simultaneously (and need equity from your sale to do so) then it's going to add to hassle on the completion day (as funds will need to be transferred between your solicitors). As well as requiring you to contact two separate firms to coordinate anything else happening in the chain.

newsgroupmonkey_

simon_or said:

That's interesting because that wasnt my experience at all. My transactions were comparable to yours (more expensive on the purchase) but my legal fees was only about £50 or so more than yours. And overall cheaper as the disbursements seem like they were lower than yours.

This is what I ended up paying....

Description	NET	VAT	Total
Purchase Legal Fees	£525.00	£105.00	£630.00
Purchase Gifted Deposit Fee	£50.00	£10.00	£60.00
Sale Legal Fees	£500.00	£100.00	£600.00
Total Professional Fees:	£1,075.00	£215.00	£1,290.00
liable for the following estimated third party disbursements and additional fees:
Description	NET	VAT	Total
ID Check	£12.00	£2.40	£14.40
Purchase Telegraphic Transfer Fee	£30.00	£6.00	£36.00
Sale Telegraphic Transfer Fee	£30.00	£6.00	£36.00
Land Registry Fee	£150.00	£0.00	£150.00
Bankruptcy Search	£4.00	£0.00	£4.00
Land Registry Pre Completion Search	£3.00	£0.00	£3.00
Office Copies & Title Plan (Per Copy)	£6.00	£0.00	£6.00
National Conveyancing Search Pack	£237.50	£47.50	£285.00
Total Additional Fees:	£472.50	£61.90	£534.40
Grand Total	£1,547.50	£276.90	£1,824.40

I'll see if I can find the original quote from the Estate Agents.......

newsgroupmonkey_

newsgroupmonkey_ said:

simon_or said:

That's interesting because that wasnt my experience at all. My transactions were comparable to yours (more expensive on the purchase) but my legal fees was only about £50 or so more than yours. And overall cheaper as the disbursements seem like they were lower than yours.

I'll see if I can find the original quote from the Estate Agents.......

ANTICIPATED SELLING FEES (VAT Rated Items):
Our Conveyancing Fee	£949.00
Mortgage Lender Legal Fee	£200.00
Contract Preparation Fee	£50.00
Bank Transfer Admin Fee (Per Payment)	£40.00
Client Identity Verification Fee (£18.00 per person)	£36.00
ANTICIPATED LEGAL FEES:	£1,275.00
EXPENSES (VAT Rated Items):
TM Secure Online Interactive Portal Fee (£18.00 per transaction) if selected	£15.00
Land Registry Title Information	£9.00
TM Property Search Case Fee	£5.00
Total VAT at 20%	£260.80
ESTIMATED CONVEYANCING FEES & EXPENSES	£1,564.80
ANTICIPATED PURCHASE FEES (VAT Rated Items):
Our Conveyancing Fee	£949.00
Mortgage Lender Legal Fee	£200.00
Stamp Duty Land Tax Return Preparation Fee	£100.00
Bank Transfer Admin Fee (Per Payment)	£40.00
ANTICIPATED LEGAL FEES:	£1,289.00
EXPENSES (VAT Rated Items):
Searches Before Exchange	£291.67
TM Secure Online Interactive Portal Fee (£18.00 per transaction) if selected	£15.00
TM Property Search Case Fee	£5.00
Bankruptcy Search - Before Completion (£2.00 per person)	£4.00
Bankruptcy Search - Before Exchange (£2.00 per person)	£4.00
Priority Search Fee	£3.00
Payments collected for others (VAT charged by them):
Land Registry Fees	£150.00
Total VAT at 20%	£322.33
ESTIMATED CONVEYANCING FEES & EXPENSES	£2,084.00
GRAND TOTAL	£3,648.80

But hey, they had a no completion, no fee.

Troy_af

user1977 said:

If you're selling and purchasing simultaneously (and need equity from your sale to do so) then it's going to add to hassle on the completion day (as funds will need to be transferred between your solicitors). As well as requiring you to contact two separate firms to coordinate anything else happening in the chain.

Thanks for the info. I understand that it would be somewhat of a hassle, but surely its something solicitors are used to dealing with? I trying to weigh up if the added hassle would be worth it for the process to be sped up (I reckon I'm probably looking at at least 4 weeks quicker with the new solicitor I'm considering).

Thrugelmir

How is the new solicitor going to save you 4 weeks ? 

eddddy

simon_or said:

As for the sunk effort, that's just par for the course for the industry they're in, just like all the unpaid work done by the estate agent, mortgage broker, bank, etc when a transaction falls through before completion.

I think that's looking at things a little over simplistically.

You hire an estate agent to find a viable buyer, and progress the sale to exchange of contracts.

• If the estate agent succeeds in their role - you pay them their fee
• If the estate agent fails in their role - you don't pay them their fee

There are times when a sale falls through, and there was absolutely nothing the estate agent could have done to stop it. So the estate agent takes on some risk. But that's typical for a sales role.

(The sale of a used car might fall through because the buyer can't get a loan, or because the AA inspection finds problems. None of this is the salesperson's fault - but they still don't get their commission.)


But if a sale falls through, it's not usually because a solicitor has failed to perform their role. (If it genuinely was because your solicitor failed in some way, you might complain, and argue that you shouldn't pay their fee.)


Similarly, if a mortgage adviser says they can find you a mortgage lender who would accept your credit history, etc - but then they can't, they've failed, and I don't think they should be due a fee either.

Troy_af

Thrugelmir said:

How is the new solicitor going to save you 4 weeks ? 

It is more my own judgement. Its not so much the new solicitor being quick (Ive used them in the past and the time scale was pretty average), its more my current solicitor being extremely slow. Staff issues which they've admitted to etc. I was looking at 5 or 6 month to complete with them even without the issues that came about causing me to pull out.