Oxford, United Kingdom (PRWEB UK) 1 August 2012
The typical move for a homeowner will involve legal costs for both the sale of their old house and the purchase of their new one. And if they use a traditional high street conveyancing solicitor then, on average, they’ll pay almost twice as much as they need to.
This surprising figure comes from a survey by online estate agent House Hop.1 House Hop conducted an undercover survey of 52 randomly chosen high street solicitors and compared their quotes to those from a panel of online solicitors.
Each solicitor was asked to provide a quote for an identical transaction involving the sale of one property and the purchase of another. The quotes were for average priced houses (since solicitors often base their fees partly on a property’s value).
£850 more expensive
The result: the average cost (excluding search costs, which are fixed2) of a high street solicitor was £1,745 compared to a cost of just £895 if you go online. That’s a saving of £850 (48.7%).
With the number of residential property transactions likely to complete in 2012 being around 984,0003 that represents a potential overpayment by homeowners of £836 million.4
End of the "high street monopoly"
So why is going online so much cheaper? Quite simply the internet has thrown open the gates of competition. In the old days there was a virtual “high street monopoly”. Homeowners were forced to choose from a tiny handful of local firms all of whom charged similar (high) prices. Today conveyancing can be done from anywhere in the country and so competition – at least online – has forced prices down.
Beware online "law factories"
This is great news for consumers, but a word of warning: not all firms offering online conveyancing are equal. Some have been described as “law factories” – essentially no more than legal call centres where underpaid (and sometimes under qualified) staff are simply unable to give the kind of service you would expect because they are too busy.
Too busy, it turns out, because the firms they work for sucker in large numbers of clients by offering ridiculously cheap headline prices (£99 is not unheard of). Of course, these prices later turn out to be completely bogus. They don’t include any of the many “expenses” that such firms use to pad out their bills. Nor do they include search costs, registration fees or VAT.
The result is overworked and unhappy staff and frustrated customers who end up with a final bill that is many hundreds of pounds more than they expected and for a second rate service.
“While many online conveyancing solicitors we work with are excellent, we’ve had nightmares with some of the cheaper ones” explained John Tighe, the founder of House Hop and a lawyer himself. “It’s still true that within the online market – like any market – you get what you pay for. The online solicitors on our panel are excellent – we get problems when buyers come to us and they’ve already instructed a poor quality online solicitor from somewhere else.”
The 4 steps to choosing a conveyancing solicitor online (without getting "ripped off")
So is it possible to benefit from the much cheaper online competition without getting caught out by an online “law factory”? The answer, according to John, is to look for an online firm that meets these four criteria:
1. They belong to The Law Society’s Conveyancing Quality Scheme (CQS)
Your solicitor should have an established reputation and specialise (or have a department specialising in) conveyancing. Membership of the Conveyancing Quality Scheme is your guarantee that your conveyancer meets the high standards set by the Law Society.
2. Get a “fixed fee” quote
Never hire a solicitor on a per hour basis. This is how costs skyrocket. And don’t accept a quote that is fixed fee providing that there are no “unforeseen complications”. Such a promise is not worth the paper it’s written on: “fixed fee” should mean exactly that.
3. Get a “complete” quote
A fixed fee quote is no good unless it includes all costs. A favourite trick of dodgy firms (both online and high street) is to give low headline quotes to get your business and then add on lots of expensive hidden extras. Your quote should include all disbursements (expenses) plus VAT.
4. Get a “no completion – no fee” quote
Around 30% of property transactions fall through, meaning that one of the biggest unexpected costs when moving is additional legal fees.
To protect yourself, find a solicitor who will work on a “no completion – no fee” basis. That way if you can’t complete you will be spared the legal fees (though you will still have to pay any expenses that have already been incurred on your behalf).
Finding a good conveyancing solicitor
To find out more about how to get a good online conveyancing solicitor and to compare a range of instant, no-obligation quotes click conveyancing to visit House Hop’s website and view their panel of recommended solicitors.
1 Survey of 52 high street solicitors for sale and purchase of identical properties.
2 The figures exclude the cost of the following searches: Local Authority; Water and Drainage; and Environmental. The cost of these searches is fixed for any given property since they are set by the local authority and the local water company. Typically, the cost of these searches adds up to around £200.
3 HMRC website
4 984,000 x £850 = £836 million