It is not uncommon for home buyers and sellers to wonder whether there is any form of obligation to instruct a conveyancing solicitor to carry out the legal process of transfer of the property’s ownership.
The conveyancing process starts when the offer to buy a house or flat is accepted. It ends with the exchange of contracts of sale and the purchase price being paid in full.
When you think of what the conveyancing process entails, it seems like a lot of daunting legal and administrative work. The first matter at hand is to decide if you want to hire a solicitor, property lawyer or a licensed conveyancer to act on your behalf or whether you want to carry out this process yourself. Some licensed conveyancers offer no sale no fee conveyancing option which makes hiring a conveyancer a better option.
In fact, in theory anyone can do the conveyancing for their own property transaction. Yes, despite what you hear, DIY conveyancing is possible.
And much of the information you need to do it yourself, from what to do if you are a first-time buyer to what information the seller should disclose is available online. So, you must wonder if you really need to hire someone to see this process through.
However, while there are no written legal regulations about DIY conveyancing, there are risks of running up expenses and mortgage providers often insist on a solicitor doing the work.
Do you save a lot of money doing your own conveyancing?
Cost savings are usually the reason why buyers and sellers want to go down the DIY conveyancing route.
The only money you save is the cost of your own solicitors and the VAT on those fees.
You will still be liable to pay stamp duty if the price of the property is over the threshold (currently £125,000 for most transactions - first time buyers are exempt up to £300,000). You may wish to learn about how stamp duty land tax works in our article, stamp duty on property purchases.
You will also have to pay for searches, which may be more expensive for you as an individual, rather than as a solicitor, and for the transfer fees that the Land Registry charges.
You should probably also have a building survey carried out as well. This can be a useful starting point for negotiating a change in sale price – work that a survey identifies as needing to be carried out within a short time frame can be a bargaining tool for reductions in price.
You should bear in mind that the conveyancing fees as a proportion of the overall buying or selling costs – they are significant, but not the only cost. The advantage of paying a solicitor is that the solicitor will have professional indemnity insurance. If anything goes wrong, you’ll be able to seek damages from the solicitor to make good the problem.
When is DIY conveyancing is not possible
Buying with a mortgage
If you buy with a mortgage, then the lender will appoint their own conveyancing solicitor to act for them. The mortgage lender will want to make sure that the property is properly registered to you, and that their charge over the property is also properly registered. The lender is likely to charge you their fees.
Selling with an outstanding mortgage registered
If the mortgage over the property has not been fully repaid it is unlikely that the lender will issue the discharge documents to remove the record of the charge at the Land Registry until after the sale proceeds have been received and the redemption funds have been repaid. A solicitor acts as a trusted intermediary in the sale, holding the sale proceeds for the lender while the mortgage provider authorises the removal of the charge.
When it is not recommended
Any property transaction can be complex. Those involving leasehold, commonhold, new build and unregistered purchases are the most complicated, but the work generally falls to the buyer’s solicitor.
While it is not impossible to carry out more complex conveyances, greater knowledge of the law is required and therefore these aren’t recommended unless you are qualified and experienced – most junior property solicitors wouldn’t handle them.
Do you need to learn technical knowledge?
If you have never carried out a conveyance, then you will have to learn the process.
There is plenty of information on the Internet. But it will take time to find it, assimilate it and put it into practice. There is also knowledge that comes with experience, such as knowing how to make a sale contract more favourable to you. There may be legal jargon used – although you might hope to avoid it and use plain English instead.
How important is the purchase for you?
To many people, buying a house is the largest financial investment they make. You’ll want to get it right because if you don’t, there is a risk of being left with an unsaleable property. Conveyancers have professional indemnity insurance, which means in case of their negligence, the seller can sue them. This happens more than you might initially think – there are mistakes that even experienced professionals often occasionally make.
So when is DIY conveyancing appropriate?
DIY conveyancing lends itself best to circumstances where there is no outstanding mortgage, and the seller and the buyer trust each other (i.e. searches are not needed). For example, transfers for no money (as a result of a deed of gift) are the most common situation. However, there is still a process to follow correctly.
Risks
Some mistakes have little long-term consequence. For example, carrying out an unnecessary or wrong search may mean you have to pay twice for it.
Others may have more serious consequences. Mis-interpreting a search result may mean that work needs to be carried out on the property (or cannot be carried out). In some cases, a property may be unsaleable.
As a seller, you need to understand the process and your legal obligations. The risk is that the buyer might convince you to reduce the sale price or to transfer money without safeguards being in place, or for poor reasons.