Do You Know What Your Solicitor Does?

Dealing with solicitors can be a daunting experience when you're not exactly sure what they do for you. In the course of any house purchase there is a lot of information and jargon used which you may not be familiar with. Sherine Silva helps answer some of those frequently asked questions

WHY DO I NEED A SOLICITOR?

Purchasing a property with the help of a mortgage, is a legal transaction and you will need a solicitor or licensed conveyancer to act for you. Therefore the work of a solicitor is to get the relevant information to help them report to you, this includes dealing with the seller's solicitors on your behalf and to raise questions about the property you want to purchase. The documents involved in this process are those registered at the land registry and also involve the contract for the purchase of the property and you will need a solicitor to act for you in dealing with these legal documents. They will also ensure that you obtain the correct legal title to your property, which means you will be able to sell the property at a later date.

WHY DOES YOUR SOLICITOR ACT FOR THE MORTGAGE LENDER AS WELL?

Solicitors and licensed conveyancers are allowed to act for you and your mortgage company unless there is a conflict of interest. It is unusual that a conflict would arise, as good title is important to both sides. Therefore one solicitor acting for both parties is more efficient and on a practical level, just one party will deal with obtaining all of the funds needed for the purchase of a property.

HOW MUCH WILL A SOLICITOR COST ME?

The perception is that all of the money that you pay to solicitors, including monies for items such as stamp duty, land registry fees and searches goes straight into their pockets is not true! The cost of a solicitor can vary and so when instructing a solicitor you should obtain an estimate of their fees including stamp duty and searches etc. Your solicitor should also provide you with a quote for their professional fees for acting on your behalf, and this is the cost that will vary between solicitors. By obtaining an estimate at the beginning and also ensuring that you choose a solicitor that is familiar with the work you wish to instruct them on, such as shared ownership matters, leasehold transactions and right to buy schemes, you should be able to budget for the costs of your house purchase.

WILL I HAVE TO MEET MY SOLICITOR?

You should expect to meet with your solicitor at least once to go through and sign the documentation for your house purchase. This may sound unnecessary and sometimes a client asks if we can simply send out the documents. I would not encourage this. There are very strict rules placed upon a solicitor by mortgage companies and also professional conduct rules to identify clients, which can only be met by a personal meeting. More importantly you are about to commit to one of the largest transactions in your lifeŠI think this warrants a meeting with your solicitor so that you can be satisfied that you have asked the questions you have and that you feel entirely comfortable with the transaction. Whilst it may be inconvenient due to work commitments, do try to meet with your solicitor.

WILL I HAVE TO PAY STAMP DUTY?

More than likely. A few transactions are exempt from stamp duty including where the purchase price is less than £60,000 or if the property is in an exempt area where the purchase price is less than £150,000 (this is set by the inland revenue and is dependent on the post code of the property).

When you are purchasing a property on the shared ownership scheme, you can opt to pay stamp duty on the rent and percentage share you are purchasing or the full market value of the property. The actual savings are dependent on the figures involved and your solicitor will be able to advise you of the differences, when you obtain an estimate.

HAVE YOU HEARD ABOUT THE STAMP DUTY CHANGES?

As of 1st December 2003, the Inland Revenue introduced a new regime as to the way in which stamp duty payable on a property transaction is reported to them. The changes have not affected the amount of stamp duty you have to pay. However, now you will have to complete a stamp duty land tax return, which is an eight page questionnaire completing details about your property purchase.

The introduction of this new form represents a major change as you are now personally liable for the information provided to the Inland Revenue and you will be asked by your solicitor to personally sign the forms. Your solicitor may complete the form on your behalf, however, you should be aware that as it will now take up much more time to deal with this aspect of your transaction it may be difficult for a solicitor to avoid passing the cost of this additional work to you.