The process of buying a new property can be a long and difficult one, with a proportion of purchases falling through at the last minute. This is why some conveyancers offer a deal in which no legal fees are paid if the sale does not go ahead. Without such an agreement in place, full legal fees must be paid, even if a sale falls through, which can be an upsetting and frustrating waste of money.
How does no sale, no fee conveyancing work?
No sale no fee agreements, sometimes also known as ‘no purchase, no fee’, remove some of the worry of a sale falling through. They are offered by a growing number of conveyancers, such as Sam Conveyancing. It is important to note, however, that this does not mean there will be no fees at all. Any monies that have been paid out during the process, such as searches and surveys by third parties, will need to be covered whether the sale completes or not. It is only the conveyancer’s fees that go unpaid. It is at a conveyancer’s discretion as to whether they want to offer a no sale no fee deal or not.
Why might someone choose a no sale no fee deal?
Recent figures show that one in three sales fell through in the final quarter of 2021 with the current financial situation expected to increase incidences. A sale which falls through is frustrating and expensive for buyers and sellers and so a no sale no fee agreement can help to mitigate this issue. If the money lost should a sale fall through will have a big impact on your finances, then it may be something to consider.
No purchase no fee agreements also mean it is in the conveyancer’s best interests for a sale to go ahead, so there is a chance they may push things along even more quickly and efficiently. Most property sales require the payment of a deposit for conveyancing services. Under the no purchase no fee agreements, many solicitors will allow you to transfer this deposit fee to a future purchase should your current one fall through. Always check with your conveyancer if this is the case before signing up.
What are the drawbacks to no sale no fee agreements for conveyancing?
As we already mentioned, such conveyancing agreements are usually not totally without fees. Any property searches and surveys organised by your conveyancer will still need to be paid for. This includes local authority searches, drainage and water search and environmental searches, which can run into hundreds of pounds. It is only the conveyancer’s fee which is waived if the sale falls through.
It may also be that overall, a no sale no fee agreement may end up more expensive than a normal conveyancing deal. This is because conveyancing fees may be higher in order to cover any deals which do fall through. Always check the paperwork to look out for hidden costs or deposits that may still have to be paid, even if the sale does fall through.
Looking closely at your finances, plus the likelihood and impact of a sale falling through, will help you decide whether a no sale no fee agreement is the best option.