Conveyancing charges - redemption of mortgage

Mathsguy

Hello all :wave:

I have a query about conveyancing charges and after a search of the forum, I can't find anything that adresses this specifically so hopefully someone can help out.

I am selling my house and have had a charges estimate from the solicitors recommended by the estate agent. In the breakdown includes an item for £111.63 for "In connection with redemption of your Mortgage (in appropriate)"

As far as I'm aware this sort of charge arises when you exit a mortgage earlier than the initial discount period (we got a 2 year fixed rate, about 21 months ago) but you would pay the mortgage provider this, not the solicitors? Can anyone explain?

Also, there is an item on the list for "Bank Transfer administration charge (per transfer)" for £41.13. Is this normal? I thought bank transfers (via BACS) were free.

Thanks in advance!

R.

Doozergirl

CHAPS transfers are same day and cost money. £41.13 is on the high side.

Any money payable to a mortgage company would be paid by the solicitor as they have to discharge the mortgage completely to be able to release the charge on your property. Whether the money comes from the sale of your house or straight from your bank account to them doesn't matter.

I suspect that the £111.63 is a charge made by the solicitor for dealing with your mortgage company. I don't like this sort of thing as it (IMO) is often used as a ruse whereby they make the basic conveyancing fee look cheap and then add on things that another solicitor would include in their basic fee.

Fancy posting us the full list of all the charges and, if you want to, the price you are selling for? Fees tend to vary with how much money they think you have

Mathsguy

Thanks Doozergirl.

Having read the estimate again, I think you're right, the £111 is in connection with them dealing with the mortgage company, since it is under the category "Our professional charges" (in addition to what I would pay the mortgage co if any early repayment charges are incurred). Yes I thought the 40 quid charge was high, when I worked in a bank a few years back, CHAPS charges were £25...

Here is the full breakdown. Sale price is c.£140k

Our professional charges:
In connection with your sale - £1075.13
In connection with redemption of your mortgage - £111.63
Carrying out money laundering check - £11.75
Bank transfer administration charge - £41.13
Third party documents:
Land registry documentation - £12.00
Land charges search - £1.00
TOTAL - £1252.64

All are inclusive of VAT

Should I shop around or is this about right?

MarkyMarkD

£1075 sounds very excessive for dealing with your sale, to be honest. Maybe half that would be reasonable unless your situation is very complex.

I should seek a quote from another solicitor and then you'll have a better idea.

Doozergirl

I'm spitting feathers!

£1252.64 to answer some questions and issue contracts. :eek: That's just for selling, right?

You are getting royally ripped off. That fee shoud be no more than £500 + VAT with a couple of disbursements.

Call local solicitors and ask for quotes, please. Most in my area quote around £400 + VAT if it's freehold. Not much more if it's leasehold.

MarkyMarkD

I can't help thinking that the estate agents must be getting a very large bung for this. The Law Society rules require such bungs to be disclosed before accepting instruction to act.

Does the quotation you've been sent mention that there is a referral payment? If not, I should ask the solicitor whether there is one, and if so report them to the Law Society for failing to disclose it in the first place.

Voyager2002

And do a web search. My conveyancing was done through an on-line agency: they introduced me to actual solicitors, but the amount I paid was a good deal less than I would have paid had I gone directly to the solicitors in question. That was four years ago, but such services are likely to be in business today.

Mathsguy

Yes just for selling. It is a leasehold so I understand that this means extra work than if it were a freehold but other than that there are no known complexities. It is still more than I thought it would be hence the post on the forum!

I haven't read through all the smallprint so don't know yet whether there are kickbacks for the agent but I wouldn't be surprised since they were the agent's recommendation.

I shall do some phoning around tomorrow! I found this site
http://www.compareandconvey.co.uk/ which looks like a handy cost comparison site

Thanks very much for the info everyone, I will let you know how it all goes!

country_sport

MarkyMarkD wrote: »

I can't help thinking that the estate agents must be getting a very large bung for this. The Law Society rules require such bungs to be disclosed before accepting instruction to act.

Does the quotation you've been sent mention that there is a referral payment? If not, I should ask the solicitor whether there is one, and if so report them to the Law Society for failing to disclose it in the first place.

I would say this is what has happened.

Mathsguy

I thought I would provide an update to my non-existent audience of zero who are still interested :rolleyes:

I went through all the solicitor documentation and made a few enquiries and there was indeed a paragraph mentioning they would make a referral fee payment of around £652! HOWEVER the £1,250 total actually included the cost of a HIP too (I guess the £652 payment covers that, and the rest goes into the agents coffers)

So not utterly extortionate as previously thought by some but still substantially more than another quote I got from that website I mentioned in the previous post of £329 for conveyancing (all inclusive, no hidden extras) and £350 for the HIP making a total saving of around £500. Whoop whoop!

:money:

Doozergirl

You can get a HIP cheaper than that even.

But very glad that you have saved yourself plenty already :beer:)