Conveyancing Fees for Buyers and Sellers: Pay Less, Close Fast
Want to save thousands on your property transaction and cut weeks off your conveyancing time? Our article reveals all including key information points such as:
- The hidden fees that could inflate your costs by 50% - and how to avoid them
- A breakdown of average costs across the UK - see how your quote compares
- The factors that influence your fees and what really makes up your total conveyancing cost
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- What are Conveyancing Fees?
- How Much Are People in the UK Paying for Conveyancing Fees?
- What is Included in Your Conveyancing Quote?
- Disbursements in Your Conveyancing Fees
- When to Pay Conveyancing Fees
- How to Save on Conveyancing Fees
- How to Choose The Right Conveyancer?
- Smart Tips for Reviewing Conveyancing Quotes
- Final Thoughts & Key Takeaways
What are Conveyancing Fees?
According to the Home Owners Alliance, only 40% of adults in the UK know what conveyancing is. This means that only 2 out of every 5 adults know about conveyancing and its purpose.
Conveyancing fees are a financial commitment that potential property buyers and sellers must be prepared for. While they may initially seem like a loss or an expense, they are an investment in the legal services that will facilitate your property transaction.
Simply put, conveyancing is the process of transferring property from one person to another. One party is the buyer, and the other party is the seller.
What Is The Purpose of Conveyancing Fees?
Conveyancing fees are costs paid to a legal professional who manages the purchase or sale of a property. These include legal fees, the charges for the legal work done, and all disbursements, which are the additional costs incurred during the process.
Conveyancing fees cover the legal process of the ownership transfer from the seller to the buyer of the property.
What Problems Does a Conveyancing Service Help You Avoid?
Understanding conveyancing fees is not just important; it's crucial. It's the key to budgeting for a property transaction and being fully prepared for the future. This knowledge empowers you to make informed decisions and ensures you're not caught off guard by unexpected costs.
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It's not just about avoiding unexpected costs: Understanding conveyancing fees also provides a layer of protection. By being fully aware of your expenses, you and your conveyancing solicitor can confidently navigate the process, knowing that you're prepared for any potential issues.
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It ensures a smooth conveyancing process: Since you know the costs, you will not be surprised by any other expenses the conveyancing solicitor charges.
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It gives you the wiggle room when pricing your property for sale: If you are depending on the purchase price for payment of the conveyancing fees, you will know the wiggle room you have during the negotiation. You can also consider the legal fees and the stamp duty land tax costs that come with the transaction.
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You expect service from the conveyancing solicitor: Since you hired a professional, you can expect professional service and are protected by contract.
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You can cover legal fees and pay within the average conveyancing fees: Understanding the fees you must pay will also give you an understanding of how much everyone else is paying. You will not feel ripped off.
Related: Is a digital conveyancing service a viable option for me?
How Much Are People in the UK Paying for Conveyancing Fees?
According to data from Compare My Move, the national average conveyancing fees for buying a house are £1,567 and £1,139 for selling a home. Average conveyancing fees for leasehold properties are £1,370 and £1,420 for selling.
This average conveyancing cost will change as time passes. Prices have been rising recently, so everyone should expect changes.
According to an online newsletter for property professionals, the prices rose for sales, see the table below to see by how much:
Factors Affecting Your Conveyancing Fees
Conveyancing fees are also assessed on a case-by-case basis. The following are some of the factors affecting your conveyancing fees:
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Property Price: The property price is the first important factor as it entails additional costs.
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Property Location: The property's location is essential in the pricing and affects the costs, which may be higher or lower than the average conveyancing fees. If your property is near a river or a coal mine, you may need to pay for additional local authority searches.
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The Difficulty of the Case: The complexity of your case will also affect the pricing. If the conveyancer has to deal with more legal issues, you should expect more costs. Please be as honest and open as possible during the intake or your first meeting and disclose any potential conflicts that you may have.
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The Conveyancer’s Experience & Reputation will also determine his pricing. If you hire a top-notch conveyancing solicitor, this will also affect his pricing.
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Type of property: The property type also affects the legal fees, such as whether it is a lease or a freehold.
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Type of buying: If you buy a Shared Ownership, help-to-buy, or right-to-buy property, a freehold vs. a leasehold property will also affect the costs, and the kind of buying transaction will also affect the incurred costs.
What is Included in Your Conveyancing Quote?
When asking a conveyancer for a quotation, you will receive one with two basic parts; The basic fee and the disbursements.
Let's take a look at both parts.
Solicitor’s Basic Fee
This covers the legal work carried out by the conveyancer. It pays their hourly or fixed rate fee for the time spent on your case. There is no fixed amount for the solicitors fees since it typically depends on the hourly rate of the solicitor that you hire.
According to the UK Government website, solicitors' hourly fees can range from £134 to £546, depending on the solicitor's years of experience.
The other key part of your conveyancing quote is disbursements. These are additional costs your conveyancer pays to third parties on your behalf. We will look at these in more detail below.
Disbursements in Your Conveyancing Fees
Disbursements, such as land registry fees, search fees, and stamp duty, are paid to third parties. These parties are not part of the transaction but would receive some payments. These disbursements are often in the form of government regulations and fiscal limitations set to ensure that the transactions between the parties are legitimate.
To get to know more about the conveyancing disbursements, you should know the costs that you should be prepared for are the following:
1) Anti-Money Laundering Checks
Anti-money laundering checks are necessary to verify the identity and legitimacy of the transaction. These checks are a way for the solicitors to check the history of the buyer or the seller and ensure that the transaction is not one done for fraud. The regulations can be found in the table below.
The anti-money laundering check costs between £6 to £20. This is a small amount for locals, but foreigners should expect to pay more.
2) Title Deeds
Another disbursement is the Title Deeds. Your property comes with a title, which is most likely in the custody of the Land Registry.
Depending on the kind of property you have, whether a freehold or a leasehold property, you should expect to pay around £6 to the land registry.
3) Conveyancing Searches
Conveyancing searches are necessary for property transactions. Average conveyancing fees do not just consist of legal costs, costs to the land registry, or even the purchase price or the leasehold property supplement fee; they also include searches to protect both parties.
There are different kinds of searches—drainage, environmental, local authority, bankruptcy, and many others. For those buying property, you must have local authority searches, which typically cost £250 to £450.
4) Property Fraud Checks
Another disbursement that you should prepare for is the property fraud check. The property fraud check would cost you around £10. It is issued to check that the lawyer you send money to is a real company and not fraudulent.
5) Costs of Transferring Ownership
The Land Registry will also charge you a fee to complete the transfer from the buyer to the seller. The cost is around £200 to £300
6) Bank Transfer Fees
Bank transfer fees apply. These are necessary if you need to reach an account on the specified day, as your mortgage provider requires. They would cost around £20 to £30.
7) Stamp Duty Land Tax
If you are buying a property worth more than £125,000, you will pay stamp duty. The rules for this tax vary depending on different factors. Let us explore them in the table below.
7.1) Who Pays for the SDLT?
The general rule is that the buyer usually pays SDLT, a significant additional cost. As highlighted in the table above, different factors affect the SDLT.
Conveyancers may include SDLT in their quotes and a guide on how to pay it. If you are looking for a good conveyancing solicitor, you should look for one whose solicitors' fees already include the SDLT.
8) Help to Buy Supplement Fee
You will also be charged extra if you enter the transaction using a Help to Buy scheme. The additional legal work costs more, potentially adding £200 to £300.
9) Gifted Deposits
If you are a lucky one and you are getting help with your deposit, you may be charged the following additional costs:
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£100 - to cover the costs of ensuring that the money comes from a legitimate source. This is not to be confused with the anti-money laundering checks.
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£200 - insurance to protect the firm from any issues arising from your income source.
Depending on the total value of the property and the originating bank from which the deposit would come, you need to consider this when gifted with a deposit.
If the deposit is from your parents, it is prudent to get them to transfer the amount of the deposit to you little by little so you can easily not have to pay this additional cost.
Unregistered Property Supplement Fee
If the property you are eyeing is not registered, you should expect an additional fee of £120 to £240.
Other Additional Costs that Could Occur
Other than the legal costs you must pay, conveyancing costs may also be affected by the transfer fee or other disbursements. Here are some additional costs you should expect:
- Leasehold Conveyancing Costs. Leasehold conveyancing costs are higher due to additional fees, such as the Deed of Covenant and Leasehold Management Pack.
- Remortgaging Conveyancing Fees. Remortgaging conveyancing fees are typically lower than buying or selling fees. The average remortgage conveyancing fee is £692.92, inclusive of VAT.
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Help to Buy ISA fee: £120
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Help to Buy Equity Loan Supplement Fee: £340
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Unregistered Property Supplement Fee: £100-£200
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Delayed Completion: £100-£200
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Indemnity Insurance: This can vary
When to Pay Conveyancing Fees
The payment of conveyancing fees depends on your type of payment structure.
Fixed Fee Conveyancing vs. Hourly Rate Conveyancing
What is the difference between fixed-fee conveyancing and hourly rate conveyancing? Let us discuss and compare.
What is Fixed Fee Conveyancing?
Fixed-fee conveyancing means that you and the conveyancing solicitor already have a pre-agreed price for the work, which should stay the same throughout the process.
Whether you find something out in the searches, the survey is different from what was presented by the seller, or you suddenly face some problems with the land registry, the costs will stay the same.
Fixed-Fee: Payment Structure and Timeline: Typically, you will need to make an upfront payment to the account and the rest upon completion. Payment terms may vary depending on the conveyancer and property type.
The good thing is that you know how much you are paying the solicitor, no matter what happens while you are going through the process.
What is Hourly Rate Conveyancing?
An hourly rate conveyancing means that the parties agree to pay the conveyancing solicitors based on the number of hours they spend on the job. This is more in tune with legal fees, but the legal costs are higher.
Hourly Rate Payment Structure and Timeline: The payment structure and timeline for an hourly rate contract are different. Since it is based on the hours worked by the solicitor, you could structure it in many different ways:
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Upfront payment is required for the contract's acceptance, followed by every transaction. In this option, you will pay conveyancing fees upfront, and every transaction will be paid based on the hourly rate you have agreed on.
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There would be a payment for every stage completed. You will identify the stages, and the hourly payments will depend on which stage you are on.
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In tranches, payment is based on the percentage of completion on an agreed-upon timeline. You have an agreed-upon timeline, and payment is made based on the number of hours used in the tranches.
How to Save on Conveyancing Fees
If you are trying to save a couple of pounds, you may still save on the average conveyancing costs. Just remember C-A-T: Compare, Ask, Take!
- Compare Conveyancing Quotes from Different Solicitors: Compare the quotes offered to save money. Companies' legal fees differ, so it's advisable to compare them and try to get more value for your money.
- Ask Potential Providers about Fixed-Fee Conveyancing Options they Offer. If the expectations from both parties are fixed, quotations will be better. Ask potential providers about the conveyancing fees you could get at a fixed rate.
- Look at Using an Online Conveyancing Service: Online services may get you a better deal. You can also easily check referrals and feedback from their previous customers.
How to Find the Right Conveyancer
There must be a textbook definition of who or what the right conveyancer can do and how to pick the correct one. However, there are some steps that you can take to make sure that you keep the right companies as your options.
1) Research & Compare Conveyancing Solicitors
There is a list of the top service providers you can choose from. Research and compare the companies that you will search online.
- Do they offer ground rent?
- Is there indemnity insurance in their services?
- Do they have a management company for those who want to sell property?
- How much of the legal fee goes directly to the service?
- Do they check for the HM land registry?
These are some of the considerations you should consider when looking for the right conveyancer.
2) Check their Experience & Reputation?
Experience and reputation are two things that you cannot buy. If the conveyancer you are considering has many years of experience and a reputation that precedes them, we can guarantee they may be a good fit for you!
Evaluate Their Process and Pricing
A reputable conveyancing firm will be upfront about their process and fees. Here's what to look for:
- Clear explanation of each step in the conveyancing process
- Detailed breakdown of all fees and potential additional costs
- Transparent timeline for completion of each stage
- Willingness to answer your questions about their methods and charges
Knowing and learning about their approach and costs helps you avoid surprises and ensures you're getting value for your money. Don't hesitate to ask for clarification – a good conveyancer will be happy to explain.
Smart Tips for Reviewing Conveyancing Quotes
When comparing conveyancing quotes, it's crucial to know what to look for. Here are some key tips to help you make an informed decision:
1) Be Skeptical of Suspiciously Low Quotes
If a quote seems too good to be true, it probably is. Extremely low quotes may indicate hidden fees or subpar service. Remember, choosing based solely on price could lead to costly issues later in your property transaction.
2) Ask About All Potential Costs
Don't be afraid to ask questions about the quote. A reputable conveyancer should be happy to explain their fees and potential additional costs. Some key questions to ask:
- Are there any circumstances where fees might increase?
- What disbursements (third-party fees) are included?
- Are there any fees for uncommon situations (e.g., properties outside the HM Land Registry)?
3) Understand the Complexity of Your Transaction
The complexity of your property transaction can significantly impact the final cost. Factors that might increase complexity (and cost) include:
- Leasehold properties
- New-build homes
- Shared ownership schemes
- Properties with legal complications (e.g., boundary disputes)
Make sure your conveyancer is aware of any unique aspects of your transaction upfront.
4) Do Your Homework
Research is key to finding the best value for your money:
- Compare quotes from multiple conveyancers
- Check their experience and reputation
- Look for reviews or ask for references
- Ensure they're licensed and regulated
5) Prepare Your Documents
Having your legal documents ready can help you get a more accurate quote and potentially speed up the process. This includes:
- Property title deeds (if you have them)
- Recent utility bills
- Mortgage details (if applicable)
- Any planning permissions or building regulations approvals
6) Look Beyond the Quote
While the quote is important, also consider:
- The conveyancer's communication style
- Their estimated timeline for completion
- Their experience with properties similar to yours
Comparing conveyancing quotes is crucial, but it's about more than just finding the lowest price. Look for a licensed conveyancer who offers transparency, experience, and good communication. For sellers, consider exploring reputable house buying companies as an alternative to traditional estate agents - they might simplify the process for you and generally cover all conveyancing fees.
Final Thoughts & Key Takeaways
Conveyancing fees are a vital aspect of property transactions. Understanding them helps you budget effectively and avoid surprises. Here are the essential points to remember:
- Fees vary widely based on property type, location, and chosen conveyancer. Do thorough research and comparisons to find the best value. Use a conveyancing calculator for a more accurate estimate before approaching firms.
- Expect additional costs when using a company's legal services for conveyancing, whether you're buying or selling.
- While conveyancers are typically more affordable, solicitors are better equipped for complex legal matters. If hiring a law firm, ensure your conveyancing solicitor is experienced.
- Clarify payment schedules upfront. You may need to pay at different stages, including an initial fee and subsequent costs during the transaction.
- Be prepared for various disbursements, including property fraud checks. This is standard practice, but don't hesitate to ask questions about any additions.
- Leasehold properties often incur higher conveyancing fees than freehold properties.
Remember, while property transactions require effort, professional help is invaluable. These insights should help you navigate conveyancing fees and set realistic expectations for costs involved in your property sale or purchase.
