Buying and selling property is likely to be the largest and most stressful financial transaction that you will experience. So, you want to make sure you are getting professional advice, making the right decision and minimising your risk of anything going wrong.
There have been a number of issues in the press recently where homebuyers have been left in the lurch at crucial moments of their transactions by their online conveyancers who they cannot get hold of without heading to Twitter!
With seemingly everything available online at our fingertips these days, it’s only natural for people to look at online services for their property sale or purchase too. However, if you are thinking about using an online conveyancer, there are a number of pitfalls to be alert of before going ahead.
- Lack of personal service – when using an online company, you will be contacting a call centre rather than having one dedicated person working on your transaction.
- Check they are insured – it is crucial to know whether the company you are using have indemnity insurance to cover against any mistakes made. Many do not.
- Be fraud aware – online firms where most communications are via email and involve the transfer of large amounts of money carry more risk of being hijacked by fraudsters.
- No legal advice – one of the main issues is the fact that you are likely to be dealing with individuals who do not have any legal training or qualifications. If anything unusual or complicated cropped up within your transaction they wouldn’t be able to give you any advice to protect your best interests.
- Lack of local information – there are many benefits of having someone working on your transaction who knows the local property market, estate agents, developments, councils etc.
Instructing a Solicitor
The main reason that people look to use an online conveyancer is the cost. Due to their limited overheads, they can afford to undercut the traditional firm of Solicitors.
But are you certain that you are getting a good deal? Be wary of hidden costs and nasty surprises later down the line and check that the quote includes everything. Are you paying less and receiving a sub-standard service? All too often the cheapest is not usually the best option, particularly when relating to such a big investment.
For a second opinion or to obtain a quote for your upcoming property sale or purchase, please get in touch with our friendly, personable team on 01256 844888 or email enquiries@lambbrooks.com. For a speedy estimate, please speak to our online chat assistant (who is a real person, not a robot) and give them the details of your sale or purchase. A member of our team will then get back to you with an estimate.
Recent Issues with Online Conveyancing Companies
Of course, sometimes things do go wrong with property transactions that are outside of anyone’s control, but there seems to be high volumes of issues with online conveyancing companies at the moment which is causing a lot of alarm.
We have heard cases where completions have happened without any communication, firms have closed for business and homebuyers have had to find a new solicitor to take over with no pre-warning, clients have been left homeless over a weekend, been unable to get hold of anyone and have had to resort to posting negative reviews and tweets to spark a response.
At Lamb Brooks, we have noticed an increase in the number of people coming to us after having instructed an online company and feeling frustrated with the process. It is quite an upheaval and an additional expense to change solicitors mid-way through a transaction, so just goes to show how dissatisfied many clients have been.
Online Conveyancing Companies
Online solicitors or conveyancing companies are able to charge lower prices for their services because they have cut out a lot of the overheads that traditional high-street firms have to cover. With no offices to run, printing expenses, salaries to qualified solicitors or support staff they are able to undercut traditional firms, but usually only by taking on large volumes of enquiries at a time – a stack them high, sell them cheap approach!
An online conveyancer should be able to do all the transactional parts of buying or selling a property that a Solicitor would do but will be very limited when it comes to legal advice or providing any insight into risks. Most of the time they have not completed the legal training or competencies that high-street law firms are obliged to.
Pros of Using an Online Conveyancer
At the outset two obvious benefits of selecting an online conveyancing firm are the apparent lower costs and the convenience.
Online conveyancers will quote a cheaper rate that most high-street law firms just cannot compete with if the deciding factor is cost alone. Moving house is expensive – with estate agent fees, stamp duty land tax, removal companies, decorating and new furniture, it isn’t a surprise that people look to save costs wherever they can, however this should be carefully considered given what an important and sensitive purchase a home can be. Often it is worth spending a bit more to receive a higher quality, personal service that will give you peace of mind.
An online firm will often communicate over email, text message or an online portal so that you can check the progress of your transaction. This may be a plus for people who work long hours, are busy, travel a lot or live outside of the UK. However, we have heard of cases where the online portal is not regularly kept up-to-date and therefore clients end up needing to call or email for progress and are unable to make contact.
Cons of Using an Online Conveyancer
As highlighted earlier in this article there are a number of risks to using an online conveyancer too. They are quite frequently referred to as ‘conveyancing factories’ by those in the industry. People who have worked at firms like this have described the job as being part of a production line, just working on the same small part of a transaction over and over before passing it onto the next step.
To expand on the points raised:
- Lack of personal service
When navigating your property sale or purchase, or perhaps buying your first ever home, it is comforting to know that there is someone at the end of the phone should you have any questions or concerns. Unfortunately, when using an online only business, you are likely to deal with several different people throughout the transaction. You would be dialling into a call centre, logging into an app or portal for updates and emailing a generic email address, so you would not receive much of a personal service. There is a risk that things slip through the net where various people are all working on the same file. This can become further complicated if and when people leave the organisation or you run into any issues.
- Insurance and Compliance
Unlike law firms who have to undergo a number of audits and compliance exercises every year, some online firms are not regulated or insured in the same manner. This can leave you at high risk if something was to go wrong or mistakes were made with your property sale or purchase. Mistakes are more likely to be made when companies take on too many cases at once. We know that online conveyancers need to take on large volumes of work at once in order to balance out their low charges.
- Be Fraud Aware
Conveyancing departments within law firms are frequently targeted by fraudsters as they know that large sums of money are exchanged, and when people are stressed or under pressure, they are more susceptible to fraudulent attempts. Online conveyancing only businesses are likely to experience even higher levels of this type of activity. Whilst technology can have many advantages, websites, portals and emails can be manipulated and compromised by fraudsters who know what they are doing.
- No Legal Advice
Without speaking to real people, who hold legal qualifications and experience, there is a risk of your best interests not being taken care of. More complex issues can easily be missed when completing online forms and tick boxes, which have more chance of being identified when talking through the transaction particulars with a legal expert. They will understand the pitfalls and red flags but can also provide guidance on the best way to own property and provide advice on more complicated, niche aspects.
- Lack of local information
When dealing with a local high-street law firm, the person dealing with your matter is likely to live and or work locally to where you are buying. They will have a good understanding of the types of property, future developments, the local council and searches required. Someone from an online business could be based anywhere in the country / world with no knowledge of the area you are purchasing in. They are also less likely to have connections to other local professionals or be able to make any recommendations.
Another concern to look out for is that the ‘cheap’ quote actually includes all charges and isn’t misleading. It is best to read the small print and make sure you are not having the wool pulled over your eyes before you commit. We are aware that online conveyancing companies charge extra ‘add-ons’ which should have been made transparent at the outset.
Perks of Using a High-Street Solicitor
A firm of Solicitors is likely to be more expensive than using an online firm, however there are many perks to using a reliable, trusted firm to ensure that your property sale or purchase goes smoothly.
It is important to consider the amount of money you are investing into your property and how spending just a little bit more can give you peace of mind and a smoother, professional service.
Some other benefits of instructing a high-street solicitor include:
- Dedicated person working on your transaction from start to finish
- Personal, monitored email address to contact rather than a generic mailbox answered by multiple people
- Direct dial telephone number to speak to your personal conveyancer, no call centres
- Ability to have a face-to-face meeting if required
- Fully insured, up to date with all regulatory compliance and training
- Highly vetted people working on your case
- Qualified, experienced Partners / Solicitors overseeing the department
- In house experts in other areas of law which may help you now or in the future
- On Mortgage Lenders panels
- Local knowledge of the property market, developments and local professionals
How to Decide Who to Instruct?
It can be difficult to know who to entrust with your property transaction, especially if you are new to the housing market and do not have any previous experiences or connections to go by.
- Do your research online – make sure the companies or firm you are considering are authorised and regulated by the Solicitors Regulation Authority (SRA) and have the Conveyancing Quality Scheme (CQS) accredited status.
- Check their website for more information, ensure that they are a real business with an address that you can check is legitimate.
- Are they on your lenders panel? If not then there is a chance your mortgage company will refuse to work with them.
- Check Google reviews – this will help you to see how happy (or unhappy) their clients are.
- Ask friends and family for recommendations.
- Ask your mortgage broker, bank manager or estate agent for ideas on local firms to instruct. But be aware of any ‘referral fees’ they may receive from certain organisations which they should disclose to you.
- Ask yourself what matters most when instructing someone – is it cost, reputation, locality, likeability – or a mixture of everything?
Contact Us
For more information or for a no-obligation estimate for your house sale or purchase, please get in touch with our friendly team of property experts today.
Call us on 01256 844888, email enquiries@lambbrooks.com or speak to our online chat assistant – who is a real person, via our website.
We hope to help you with your next transaction and hope that this article has provided some insight / clarity.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.