YOU can save hundreds, if not thousands, of pounds on the legal costs of buying and selling your home. But you have to know the right questions to ask, or your initial cheap quote could turn into a thumping big bill.
The legal side of home-buying - conveyancing - was traditionally a nice little earner for solicitors. But the lawyers have been hit for six by the slump in house sales, and although there are signs that the property market is picking up, legal fees are still at an all-time low.
Compared with the fees charged by estate agents, legal charges are an absolute bargain.
You should always get at least three or four quotes for legal costs. Do not automatically plump for the solicitor 'recommended' by the estate agent. A personal recommendation from an unbiased friend or colleague is a better way to find a solicitor.
Your initial contact will usually be by telephone. Comparing quotes is not for the faint-hearted, not least because you have to give some solicitors the third degree to wheedle out of them what you will actually end up paying.
I anonymously rang six solicitors chosen at random, to get quotes for a sale and purchase. I was selling a flat for pounds 100,000 and buying a house for pounds 150,000 with an endowment mortgage of pounds 80,000 from a high street lender.
Many solicitors include the legal work on the mortgage in their fees. Always ask if this is the case, as some lesser-known lenders will employ only their own solicitors. You then end up paying two sets of legal fees, which can be very costly.
Legal fees will have VAT added and you will also have to pay extra for standard disbursements such as searches and stamp duty.
Initially, the cheapest quote in my survey, by hundreds, if not thousands, of pounds, was from a firm in Chelmsford, Nigel Broadhead Mynard. It quoted pounds 150 on the sale and pounds 140 on the purchase.
However, when I asked more questions the fees piled up. There was a charge of pounds 59 to redeem the mortgage on the sale. On the purchase there was an extra pounds 120 legal fee for the mortgage. There were also two pounds 4 charges for linking the transactions.
Some solicitors add extra disbursement charges for photocopying and postage, and bank charges to transfer the completion money. Always ask detailed questions about these as they do mount up.
Nigel Broadhead said there could be - but not necessarily - a charge of up to pounds 20 a transaction for faxes and photocopying. In addition, there is a bank transfer charge of pounds 29.
Knight & Co of Eastleigh, Hampshire, quoted legal fees of pounds 210 on the sale and pounds 230 on the purchase.
These fees included acting on the mortgages and there were no extra disbursements apart from the bank transfer charge of pounds 25.
Michael Seward and Co of Warrington quoted a total fee of pounds 480 for all the legal work. In addition, disbursements would be 'no more than pounds 100' but that figure included the search fees and a bank transfer charge of pounds 20.
Nearer to London, legal fees rise. You can keep the costs down by comparing quotes and finding a solicitor who offers fixed-fee conveyancing. Most solicitors' fees increase as the property prices rise. With fixed-fee conveyancing the legal fees are the same whatever the price of the property - a considerable saving on high- priced properties.
Anthony Holden Croft in west London offers fixed-fee conveyancing. The cost is pounds 250 for each transaction. In addition, there is a bank transfer charge of pounds 26.
Crellins of Weybridge, Surrey, offers fixed-fee conveyancing for pounds 325 a transaction. In addition, there is a pounds 30 charge per transaction, which covers the cheaper searches, postage, photocopying, and the bank transfer charge.
Not only solicitors carry out conveyancing. Ewart Evans & Co, a licensed conveyancer, quoted pounds 305 for the sale, pounds 350 for the purchase and pounds 50 for the mortgage work. On top was a pounds 100 disbursement charge, including the searches and bank transfer charge.
If you really want to use a central London firm for routine domestic conveyancing then you will pay the price.
The highest quote I got - and it would certainly not be the highest in London - was from Finers. The total legal fees would be 'not more than pounds 1,250'. There were no extra disbursements apart from a charge of pounds 22 for the bank transfer.
An honourable mention goes to the London firm of Malkins. It gave the second-highest quote - pounds 1,000. The bank transfer fee was pounds 15 and there was 'nothing else on top'.
However, I did not have to ask one supplementary question. Jonathan Lemon, a partner in the firm, positively volunteered information about all the costs involved.
One final tip: get all the firms to confirm the figures in writing. And remember, cheapest is by no means best. You want someone who will return your phone calls, is not always out at meetings, and who knows one end of a lease from another.
Here is a checklist of the questions you should always ask when you are looking for a telephone quote.
What are the legal fees for the sale/purchase?
Is the fee fixed or will it increase or decrease according to the work involved?
Can the firm act in connection with the mortgage? If so, does it charge extra for acting on the mortgage?
If the firm does not act for the lender, what will the lender's legal costs be?
What are the disbursements, such as stamp duty, land registry fees and local authority search fees?
Are there extra charges for postage, telephone calls, photocopying or faxes?
Is there an extra charge for arranging to transfer the money on completion?
Are there any other charges whatsoever?
Who will actually be doing the conveyancing? Will it be a partner, a solicitor or an unqualified member of staff? Does he or she specialise in conveyancing?
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies