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What Does No Completion, No Fee Mean?
No completion no fee, or also referred to as ‘no sale, no fee’, means that if your sale or purchase of a property falls through you will not have to pay any legal fees to your conveyancing solicitor.
How does no completion, no fee work?
No completion, no fee is a service often offered by conveyancers or property solicitors when handling property transactions. It works to protect the buyer or seller from having to pay for legal fees if their transaction fails to complete. This can include reasons such as a seller’s buyer pulling out at the last minute.
House sales can fall through for many different reasons, with hundreds of thousands of property transactions collapsing every year. Instructing a solicitor who offers a no sale, no fee guarantee gives piece of mind to the buyer or seller that they will not be left having to pay expensive legal fees, should the transaction fail to complete.
Under a no completion, no fee agreement you will usually need to pay a small deposit upfront and the rest of the legal fees will be billed upon completion.
It is however important to note that even under this sort of agreement, if the transaction fails you will still need to pay for any additional fees – including third party disbursements. These are the costs for surveys and search fees that your solicitor may have already incurred on your behalf.
What are the benefits of no completion, no fee conveyancing?
The main benefit of a no completion, no fee agreement is of course that you will be protected from having to pay legal fees if your transaction breaks down.
Some property solicitors will also allow you to transfer the deposit you have already paid over to a second transaction.
What costs are included?
The costs included in a no completion, no fee agreement only include the costs for the work completed by your solicitor or conveyancer. This includes work such as writing letters/emails, organising paperwork and looking after your transaction.
It does not cover third party costs such as the fees paid for searches and surveys.
What are the main reasons for sales falling through?
It is estimated that roughly a third of property transactions collapse before completion. The reasons for which include:
- Issues with finance: This includes buyers not having their finances in order in time to progress with the transaction, such as not having the necessary deposit or being declined for a mortgage.
- A break in the property chain: Some property chains can include multiple buyers and sellers that consequently rely on each transaction completing in order to proceed. The longer the chain the more at risk you are for the chain breaking somewhere down the line.
- A bad survey result: If a buyer gets the results back from a survey that indicates that the property needs expensive repair work, such as a full electrical re-wire or that the property has major structural faults, they may drop out of the purchase.
- Gazumping: This is the term used to describe when a seller accepts a higher offer for their property, when they already have a potential buyer in place who is going through the process of buying the property. This tends to happen more when property prices are rising and the seller is tempted by higher offers further down the line.
- Gazundering: This is the opposite of gazumping and happens when a buyer lowers there offer at the last minute. This may lead to the seller neglecting their offer and have to start looking for a new buyer.
- Someone has changed their mind: The transaction could break down for the simple reason that someone has changed their mind about going ahead with the purchase or sale. This could be for financial or personal changes in their life.
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