When embarking on the exciting journey of buying or selling a property, it’s crucial to be vigilant about potential hidden costs associated with residential conveyancing. While securing quotes from conveyancing solicitors, it’s not uncommon for individuals to encounter unforeseen expenses that can impact the overall budget. In this article, we will explore some of the hidden costs to look out for when obtaining quotes for residential conveyancing.
Disbursements:
Disbursements are third-party costs incurred by your conveyancer during the conveyancing process. These can include expenses for local searches, land registry fees, and stamp duty. It’s essential to clarify with your solicitor what disbursements are included in their initial quote and whether there may be additional charges for unexpected disbursements that may arise.
Bank Transfer Fees:
When transferring funds between parties during the property transaction, banks may charge fees for electronic transfers. Confirm with your conveyancer if these fees are covered in the quoted price or if they will be added as an extra cost. Being aware of potential bank transfer fees helps avoid surprises in the final billing.
VAT:
Always check whether the quoted price includes Value Added Tax (VAT). Some quotes may present the fee excluding VAT, leading to a higher final cost. Ensure clarity on whether VAT is already incorporated and whether it applies to all aspects of the conveyancing process.
Leasehold Fees:
If you are dealing with a leasehold property, additional fees will arise, in the form of ground rent, service charges and Landlords fees for change of ownership. In most cases these extra costs won’t be covered in the initial quote as they will not be fully known until further down the line. These charges will be payable whatever conveyancer you use and will appear on your final bill, so look out for these.
Mortgage Administration Fees:
For buyers securing a mortgage, some firms charge additional fees for handling the mortgage administration process. Inquire about any potential charges related to liaising with mortgage lenders and ensuring that these costs are outlined clearly in the initial quote.
Unregistered Properties:
Some firms charge extra to deal with unregistered properties as they can require more extensive checks and documentation, as the property details are not held in the Land Registry database. The Land Registry also charge a higher administration fee for registering such properties. Be aware that the higher Land Registry fee may not be covered in the initial quote as your conveyancer will not be aware of whether the property is registered at this stage.
SIM Fees:
Some firms will charge their clients an extra fee when the matter is to exchange and complete on the same day (simultaneously). SIM fees are less common but can be an additional cost to look out for
SDLT Form:
Some firms charge a fee to draft the Stamp Duty Land Tax (SDLT) form and submit it to HMRC on completion. Completing and submitting this form is a mandatory part of purchasing property.
Indemnity Policy on risk:
Indemnity policies are sometimes required to cover potential legal issues such as missing planning permissions or building regulations. If such policy is required, there will be the cost of the indemnity policy (which your conveyancer will confirm to you during the process, as prices vary) but some firms will also charge an admin fee to put an indemnity policy on risk for you.
Understanding the potential hidden costs associated with residential conveyancing is vital for a transparent and stress-free property transaction. When obtaining quotes from Conveyancers , it’s crucial to seek detailed information about disbursements, bank transfer fees, VAT, leasehold charges, and mortgage administration fees. By doing so, you can make informed decisions, avoid unexpected financial surprises, and ensure a smoother conveyancing process.
