Hiring a conveyancer when buying or selling a house is a necessity that you shouldn’t overlook. While it will cost you money to hire a conveyancer, they can help you go through a lot of the legal work involved in a property transaction. However, before hiring a solicitor or a conveyancer, you should first know what hiring someone offering a ‘no sale no fee’ conveyancing service entails. It’s not as straightforward as you might think it is, so read on to learn more about the risks involved when choosing a ‘no sale no fee’ conveyancer.
What is a “No Sale No Fee” Conveyancer?
Put simply, a ‘no win no fee’ conveyancing agreement means your solicitor will take on your claim or process knowing that if they do not “win” or complete the deal, you would not have to pay for their services. At least, that’s how the principle works. However, that doesn’t mean you won’t be spending any money at all when dealing with a conveyancer. Let’s break down how the arrangement works to understand the costs of going through with it.
Why Do People Prefer a “No Sale No Fee” Agreement?
In a typical working relationship between you and your solicitor, you’ll need to pay for their services regardless of whether the purchase or sale of a property is completed. Let’s say the transaction did not push through after a couple of weeks; you’re still required to pay them for all the legal work they’ve done for you up until that point.
The problem with that particular setup is the cost involved in paying for the services of a solicitor. Even if you were not able to sell or purchase the property, you’d still be shelling out money for their services. What makes a ‘no sale no fee’ more desirable is the absence of any legal fees should the transaction fail.
Also, the chances of having a failed property transaction are actually higher than you think. According to the HomeOwners Alliance, there are around 300,000 property transactions that collapse each year, which is a significant number. This just makes ‘no sale no fee’ arrangements much more in demand.
How Does a “No Sale No Fee” Agreement Work?
What many buyers and sellers need to know is that there are still some expenses associated with a ‘no sale no fee’ agreement. Typically, with a ‘no sale no fee’ deal, there is a small deposit initially upon instructing your conveyancer.
Also, the legal work needed to be done in a property transaction often involves third-party fees that even a law firm or conveyancer can’t control, like searches and surveys. Even if a sale falls through, you’ll still have to pay these third-party charges. While you won’t need to pay for the work your lawyer has done if your transaction doesn’t complete, there will still be some fees to pay.
What is the Cost of “No Sale No Fee” Conveyancing?
Conveyancing costs in the UK vary greatly depending on the firm and the type of services they provide. On average, solicitor’s fees cost around £850 to upwards of £1,500. This doesn’t even include the search and survey costs, which can easily go up to £1,000. In a ‘no sale no fee’ deal, however, you only need to pay your conveyancer an initial payment of about £160 to £300. If the transaction falls through, then you still need to pay those third-party fees. However, if the sale or purchase was completed, you need to pay your solicitor’s legal fees in full.
Conclusion
Engaging with a ‘no sale no fee’ conveyancer does have its advantages and disadvantages. While it’s not as straightforward as not paying for anything at all, it sure does let you save some money, especially if you think there’s a high risk for your property transaction to fail.
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