What is No Sale No Fee Conveyancing?
“No Sale No Fee Conveyancing”, also known as no completion no fee, is an agreement where you don’t have to pay legal fees if the transaction falls through. Always check with your conveyancer that this policy is in place.
Without this agreement, you will be required to pay the full legal fees, even if the transaction fails to complete. This can leave you with nothing to show for several hundreds of pounds spent on legal fees.
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, such as the cost of searches and surveys, will need to be repaid regardless of the outcome of the sale.
Who Offers No Sale No Fee?
Although not all conveyancers will offer this service, some well-known firms offer No Sale No Fee Conveyancing. You may also find that an independent or local conveyancer may also offer you this service. Online conveyancing is also an option.
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 (if it is clear the sale will fall through, for example) they can refuse to go ahead with the legal work on your behalf.
How Does It Work?
Also referred to as “no completion no fee” or “no move no fee conveyancing”, this type of conveyancing service protects the buyer or seller from potential financial loss in the event that the sale falls through. This can give you peace of mind if you have any concerns about financial loss if the sale does not go ahead.
Without a no sale no fee agreement, you will be required to pay the full legal fees for the conveyancing process, even if the transaction fails to complete. For many homebuyers, this can be a large financial loss, leaving you nothing to show for several hundreds of pounds spent on legal fees.
However, it is important to note that “no fee” is not strictly accurate as you will incur some fees if your conveyancer has already made payments to third parties on your behalf. This includes any surveys, searches and fees paid to the Land Registry. It is only the basic fee for the time spent dealing with a case that is included. Be aware that you may also be required to pay a deposit upfront.
To learn more, read What is Conveyancing?
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How Much Does It Cost?
According to our estimates (based on a sample of conveyancing costs across the UK), the average conveyancing fees for buying a house is £1,320. The average cost of conveyancing for selling is £1,270.
The cost for any type of conveyancing will depend on the property price, your location, and the conveyancing firm that you choose, but fees for no sale no fee conveyancing can be higher than “traditional” conveyancing.
In order for conveyancers to offer this service, fees will be higher so that they 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.
Third-Party Fees
The “no fee” element of the arrangement only applies to the time spent dealing with your purchase or sale. You will still be required to foot the bill for payments made to third parties on your behalf.
These include:
- Surveys
- Searches
- Fees Paid to the Land Registry
It is only the conveyancer’s time you would not be required to pay.
Fees for local authority searches, which are organised by your conveyancer, will vary as local authorities set their own fees. On average, these can cost anywhere between £50-£250.
Is It Worth Considering?
If the risk of your property sale falling through is a particular concern and losing funds for a full conveyancing service could hit you especially hard, "No Sale, No Fee" might be worth considering.
However, the protection offered by this type of conveyancing against losing money on legal fees should the sale fall through is offset by the higher costs involved. If the sale completes, you could face a higher bill than if you had used a traditional conveyancing service.
Also, remember that in the event the sale falls through, this service does not exempt you from all costs.
Advantages and Disadvantages
The advantage of this service is that if the sale falls through, you are not at risk of losing money on legal fees. However, there are other factors to consider when using this type of conveyancing service.
Below, we've set out the advantages and disadvantages of using No Sale No Fee:
| Advantages | Disadvantages |
|---|---|
| You are not at risk of losing money on legal costs if the sale falls through. | Potentially higher fees than traditional conveyancing services. |
| Your conveyancer will have an incentive to keep the sale moving as they will lose their fee if the sale is not completed. | You will still incur fees for anything the conveyancer has organised on your behalf such as environmental searches. |
| Some conveyancers may allow you to move the deposit paid on the failed sale to your next transaction. | 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?
Towards the end of 2021, one in three (34%) of house sales in England and Wales fell through before completion according to Quick Move Now. 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. A property chain forms when a line of 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 a property transaction if their property survey reveals a serious concern or potential problem such as structural issues or 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.
5. Difficulty Securing a Mortgage
Even if a buyer has a Mortgage 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 Buyer 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 prior to appointing a conveyancer.
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Is It Worth It?
Depending on your financial situation and personal circumstances, No Sale No Fee can either be of benefit or can put you at a disadvantage.
If the risk of your property sale falling through is a particular concern and the loss of funds for a full conveyancing service could hit you especially hard, “No Sale, No Fee” might be worth considering.
However, the protection offered by this type of conveyancing against losing money on legal fees should the sale fall through is offset against the higher costs involved. If and when the sale is completed, you could be faced with a higher bill than if you had used a traditional conveyancing service.
Also, remember that in the event the sale falls through, this service does not exempt you from all costs. You will still incur fees for anything the conveyancer has organised on your behalf such as searches.
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?
