Whether you’re a first-time buyer, a landlord, or a prospective buyer, there are several fees that you will need to consider when buying a new property, including your legal fees.
Legal fees typically range between £800 and £1500 plus VAT so before you begin the purchasing process it’s important to ensure that you’ve budgeted for these funds.
There’s no way of getting around these fees, as you’ll need a licensed solicitor or conveyor to carry out all of the legal work required during the buying or selling process. Additional searches often need to be carried out, which typically cost between £250 and £300.
Other major upfront costs include stamp duty, your deposit (minimum of 5% -10% of the total value of the property), any lender fees and the surveyors charge to assess the properties worth.
It’s vital that you understand the fees involved so you don’t get any nasty surprises during the process. We’ve created a helpful guide outlining when you must pay your legal fees.
When do I have pay legal fees?
Once you’ve chosen the right mortgage, checked your credit rating and then made an offer on a property, you’ll need to arrange a solicitor and surveyor to handle all of the legal work around the purchase.
You should either have the money set aside to pay these fees or confirm whether the solicitor is happy to take their costs from the equity in your current home (when selling and buying.) Many solicitors are comfortable agreeing this process so it’s worth investigating if you don’t have the liquid funds available.
Will I have to pay my legal fees if a sale falls through?
Although some solicitors don’t charge if a purchase falls through or fails to complete, you should be aware that the vast majority of solicitors still charge for search fees.
From the moment you begin the purchasing or selling process, you should be aware of your contractual agreement with the solicitor you’ve appointed to handle all of your legal work. Once both parties agree on the terms of contract, you will be sent a letter of engagement, which you will need to sign and return.
Within this contract, you will also receive an estimate of the fees you will have to pay if the purchase does not complete. Whether the purchase collapses after the offer has been accepted, or the seller changes their mind last minute, research has revealed that 3 out of 10 of prospective buyers have seen their property deal crash, at an average loss of an eye-watering £2,899.
However, if you decide to withdraw at the last minute or when you are about to exchange contracts you will be charged around 70%- 80% of the fees you were quoted at the beginning of the process, as your solicitor would have already completed most of the work.
The vast majority of sales fall through when the buyer is ‘gazumped’, meaning another buyer makes a higher offer which is then accepted by the buyer.
Of course, there are many ways that buyers can reduce the risk of a deal falling through, including avoiding a lengthy chain, making sure your finances are in order and steering clear of a complicated or difficult chain.
If you’re a contactor or freelancer, or you’re self-employed and you’re looking to move properties or take your first steps onto the property ladder, get in touch to find out more about the process and the legal fees involved.