No Sale No Fee Conveyancing Explained
No sale no fee conveyancing is an arrangement where you don’t have to pay legal fees if your property transaction falls through. This type of conveyancing is in place to protect the buyer and seller from losing a significant amount of money.
Most conveyancers and conveyancing solicitors offer this guarantee. Many cheap conveyancing quotes online are by no sale no fee conveyancers. Therefore, it’s important to check with your conveyancer that this policy is in place.
Be aware that this doesn’t mean there will be nothing to pay if the sale does not complete. Any funds paid out to third parties by your conveyancer will need to be repaid regardless of the outcome of the sale. This includes the cost of conveyancing searches and property surveys.
In this guide, we’ll take you through everything you should know about no sale no fee conveyancing. This includes the average cost and how it works.
Who Offers No Sale No Fee?
When choosing a conveyancer, it is at the solicitor’s discretion whether they want to take your case on a “No Sale No Fee” basis. Following the 1995 Conditional Fee Agreement (CFA), if the solicitor does not wish to take your case, they can refuse to work on your behalf. This may happen if it is clear that the sale will fall through.
It's important to note that no sale no fee conveyancing may also be referred to as no completion no fee conveyancing or no move no fee conveyancing.
How Does It Work?
No sale no fee conveyancing can give you peace of mind if you have any concerns about financial loss if the sale or purchase fails. Without a no sale no fee agreement, you will be required to pay the solicitor’s legal fees for the conveyancing process.
However, it is important to note that “no fee” does not include third-party fees. These include the following charges:
- Conveyancing Searches
- Property Surveys
- Land Registry Fees
You may be required to pay a deposit upfront at the beginning of the process. If the buyer or seller withdraws from the sale before the exchange of contracts, the buyer will receive their deposit back. If the buyer pulls out of the transaction following the exchange of contracts, they risk losing their deposit altogether. If the seller pulls out of the sale after exchanging contracts, the buyer will receive their deposit plus interest.
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How Much Does It Cost?
The average conveyancing costs when buying a house is £2,239 and £1,690 for selling a house. This cost consists of legal fees, conveyancing disbursements and extra fees. These fees may include purchasing a property using the Help to Buy scheme.
Any money spent on disbursements and extra fees is not likely to be recouped if the transaction falls through. Your legal costs will depend on the property price, your location, and the conveyancing firm you have chosen.
It’s important to note that fees for no sale no fee conveyancing can be higher than “traditional” conveyancing. This is so the conveyancers can recoup lost earnings from uncompleted sales. This could mean an extra 15% on your costs. Some conveyancers may also charge a deposit upfront.
Our Conveyancing Fees Calculator can provide you with a cost estimate.
No Sale No Fee Conveyancing Solicitors (Pros and Cons)
If the risk of your property sale falling through is a particular concern, "no sale no fee" might be worth considering. However, the protection offered by this type of conveyancing against losing money on legal fees is offset by the higher costs. If the sale completes, you could face a higher bill than if you had used a traditional conveyancing service.
Here are some pros and cons to keep in mind:
Advantages
- You are not at risk of losing money on legal costs if the sale falls through.
- Your conveyancer will have even more of an incentive to keep the sale moving as they will lose their fee if the sale is not completed.
- Some conveyancers may allow you to move the deposit paid on the failed sale to your next transaction.
Disadvantages
- Potentially higher fees than traditional conveyancing services.
- You will still incur fees for anything the conveyancer has organised on your behalf such as searches.
- There may be upfront deposits or hidden costs that are not included in the "main" fee. These could be charged regardless of the outcome of the sale.
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What Causes a Sale to Fall Through?
Below, we look at the most common reasons a transaction may fail to complete.
1. Property Chain
A break in the property chain is one of the most common reasons for a sale to fall through. Buyers and sellers are linked as their property transactions depend on one another. If a sale falls through, this can also have a domino effect on the buyers and sellers linked to that transaction.
2. Buyer or Seller Changed Their Mind
Sometimes a buyer will simply change their mind on a property purchase. This can be due to financial factors or a change of circumstances or priorities. Sellers also change their minds. This could be because they want to remain in their current home, or they may pull out of the sale if the process is moving too slowly.
3. Problem Identified in Survey
Buyers may also pull out of a property transaction if their property survey reveals a serious concern or potential issue. Some common house survey problems include structural movement and damp.
4. Gazumping
Gazumping occurs when a seller has accepted an offer and later accepts a higher offer from another buyer. This can happen at any point during the buying process until the exchange of contracts. To avoid this, the buyer should ask the estate agent to remove the listing from the market as soon as possible.
5. Difficulty Securing a Mortgage
Even if a buyer has a Mortgage Agreement in Principle when making an offer on a home, it does not guarantee a mortgage from the lender. If a buyer’s financial circumstances change, they may find it difficult to secure a mortgage. This can delay the sale and even cause it to collapse completely.
Is There an Alternative?
As an alternative to no sale no fee conveyancing, you could consider Home Buyers Protection Insurance. This is an insurance policy designed to cover you if the sale falls through, allowing you to recoup some costs. These include valuation fees, mortgage fees and fees for searches and surveys.
Be aware that a Home Buyer Protection policy must be taken out before appointing a conveyancer.
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Finding a No Sale No Fee Conveyancer
Using comparison sites like Compare My Move can help you find the right conveyancer for your needs. Simply fill in our conveyancing comparison form to compare conveyancing quotes from up to 6 licensed firms. You could also save up to 70% on your total costs.
All our conveyancing partners have passed a strict verification process. This includes providing proof of regulation by one of the following:
- Solicitors Regulation Authority (SRA)
- Council for Licensed Conveyancers (CLC)
- Law Society of Scotland (LSS)
- Law Society of Northern Ireland (LSNI)
- Chartered Institute of Legal Executives (CILEX)
You can also ask friends and family for recommendations if they have hired a conveyancer. This is important to keep in mind if they had a no sale no fee conveyancing solicitor.
Learn More About Conveyancing
This is part of our conveyancing guide. In our next article, we take a look at the Council for Licensed Conveyancers. To read more see: What is the Council for Licensed Conveyancers?
