Although it sounds like those dodgy adverts promising you compensation for an injury, in the past few years, ‘no completion, no fee’ conveyancing solicitor has become a bit of a ‘thing’. A quick Google search will throw up any number of legal firms promising risk-free conveyancing services but, are they too good to be true?
What is it?
When instructing a Conveyancing Solicitor for the sale or purchase of a property, most customers are made aware of the fact that, in the event that the sale falls through, they will still be liable for some charges – largely the fees charged by the Conveyancing Solicitor for his or her time spent on the work completed.
A ‘no sale, no fee’ offer means that, should your sale not go through for whatever reason, you will not have to pay any fees to your Conveyancing Solicitor even though they may have put in a considerable amount of work on the case. It’s thought that, in the past ten years, many Conveyancing firms have offered this service in order to fall in line with Estate Agents offering a similar deal. But, for a customer, what does it mean in reality?
Whereas it’s true that ‘no sale, no fee’ customers escape paying legal fees in the event of a sale falling through, those costs still exist and, unfortunately, are not picked up by a generous conveyancing fairy. In order for firms to be able to offer this service, they need to increase their fees across the board in order to recoup lost earnings from failed sales – this means that, in effect, those whose sales complete successfully are subsidising those whose sales unfortunately fail. This can mean that a successful customer may be paying an additional 15% to cover somebody’s else’s conveyancing fees.
Does it work?
Although it may seem a little unfair, many feel that a Conveyancing Solicitor working on a ‘no sale, no fee’ basis is likely to work harder to make the sale succeed as they won’t be paid otherwise. There is, however, little proof of this and, there are those who consider it bad for a solicitor’s morale to be working without a guarantee of being paid.
In addition, customers should be made aware that, although they won’t be charged for the Conveyancing Solicitor’s billable hours, they will still be liable for disbursements or costs which the solicitor has incurred on their behalf.
Although ‘no sale, no fee’ conveyancing is a viable option for many, it’s worth shopping around to check the success rate of a potential solicitor and, more importantly, how their charges compare to those of a solicitor working on a more traditional basis. Companies such as Express Conveyancing offer additional insurance free of cost which means you would save on further costs otherwise payable, for example property searches.
In the UK, it’s thought that, on average, 70% of property sales complete successfully – which are pretty good odds for those prepared to risk paying fees on a failed sale in order to avoid subsidising other customers.