There are multiple questions surrounding the topic of DIY conveyancing. including whether it is legal to do your own conveyancing what the risks are and how to do it for a buy-to-let property.
In this article, we will also be going over a step by step guide to do DIY conveyancing as the topic is hard to navigate if you do not have the right information at hand.
Adding to this, there are certainly things that can go wrong in the process but at the same time when done right you will save a lot of money and end up with a successful sale of your home by doing DIY conveyancing.
So, read on for an in-depth guide on the topic and be sure to make a note of all the specifics as missing out on a step or failing to recognise a detail could cost you in the long run.
What is DIY conveyancing?
The process of buying or selling a home without the assistance of a solicitor or licenced conveyancer is known as DIY conveyancing.
This means that the buyer or seller is responsible for performing all necessary legal work, such as drafting and reviewing contracts, conducting searches, and filling out forms.
While DIY conveyancing may save money, it is important to note that it is complex and time-consuming, and there is a risk of making mistakes that could result in legal and financial problems.
Is it possible to do my own conveyancing?
You can do your own DIY conveyancing in most cases but there is still a chance you won’t be able to do it if the property is a leasehold or on a property is not registered with the land Registry.
In addition, a house that is a flat or a property that is being sold while a couple is divorcing or separating also has issues. It can be extremely hard to be sold with your own conveyancing process.
In cases like this, it can get extremely complicated and often it isn’t viable to do DIY conveyancing. Read our article on if you need a solicitor to sell a house for further information on this.
Is DIY conveyancing risky?
There are a few things you should think about before doing your own conveyancing.
While it may appear to be a good way to save money, there are numerous risks involved that you may not have considered.
One of the most serious risks is being unable to obtain a mortgage. You may make mistakes that will cost you more money in repeat searches, surveys, and tax if you do not have the legal knowledge and protection that a Conveyancing Solicitor can provide.
You may also end up purchasing a property that is unsellable or cannot be registered after completion. Failure to recognise or comprehend any obligations of being a conveyancer while you are a seller may expose you to being exposed by another solicitor or sued.
You may end up delaying the conveyancing process or a property transaction if you lack knowledge and furthermore, because you lack legal insurance, you may be held liable for any losses.
It is fair to say that in general, hiring a conveyancing Solicitor is always safer and easier. So, whether the risks of doing your own conveyancing outweighs the benefits is up to the individual.
Is doing your own conveyancing quicker?
Whether doing your own conveyancing is quicker or not is completely up to you the individual case. It could be the case that there is a seller working with a solicitor or conveyancer who both acknowledge the deal needs to move with speed.
On the other hand, a buyer could also have a lot of knowledge around legislation but may not necessarily be a conveyancer and still be able to have the same level of conviction when processing the deal and close the deal quickly.
It all depends on who you are working with and what risk you are willing to take in order to move the deal forward as quickly as possible rather than take your time and make sure everything is done correctly.
When should you avoid doing conveyancing yourself?
You will not be able to do your own conveyancing if you have your own mortgage. This is because there is a regulation set out by lenders that states all handling of legal paperwork must be done by a professional they trust.
Not only do they have to trust this professional but they have to make sure that they have taken the necessary education and have been through Law School in order to approve a mortgage.
This is the same whether you are buying or selling and part of the process done by lenders and banks to reduce the amount of risk they take on.
So if your property involves a buy to let mortgage or a residential mortgage or anything else be wary.
Can you do DIY conveyancing on a buy to let?
Those looking to sell a house themself with a buy to let mortgage cannot do DIY conveyancing as a buy to let mortgage involves having a mortgage still owed with the property.
The advantages and disadvantages of DIY Conveyancing
There are some advantages and disadvantages to doing your own conveyancing. From the money you may save to the speed at which you will be able to finalise a deal, these are all factors in making your decision.
The pros of DIY Conveyancing
Perhaps the biggest advantage to becoming a DIY conveyancer is that you do not have to pay for a solicitor or conveyancer yourself, saving you on the solicitor fees to sell a house.
On top of this, selling a house yourself can be a fulfilling process as you’d get to learn about legislation and especially if you’re planning to sell more houses in the future, you will get to learn another skill.
Finally, Because you’re only dealing with one sale or purchase, doing your own conveyancing may appear to be a faster option.
Solicitors and conveyancers, on the other hand, frequently have multiple transactions to handle at the same time, which can cause delays in the process.
The cons of DIY Conveyancing
If you’re considering doing your own conveyancing, you should know what you’re getting into. To begin with, DIY conveyancing may not be as inexpensive as you believe.
Even if you do it yourself, you will incur costs such as searching a home before you buy it and HM Land Registry registration fees.
So, professional conveyancing fees aren’t always that expensive, and it’s worthwhile to shop around to see if you can find a good deal that is comparable to what the price would be if you did it yourself..
According to a recent report, using a solicitor or conveyancer to sell a freehold property will cost around £600-£800, and buying a freehold property will cost around £1,000-£1,500.
Another factor to consider is that doing your own conveyancing may not be any faster. You’ll have to learn as you go, which could take longer than hiring a professional but if you already have experience this may not be the case.
On top of this, making a mistake that is difficult and expensive to correct is perhaps the most dangerous aspect of DIY conveyancing.
If you make a mistake, you may have to pay a lawyer far more than the cost of the conveyancing was in the first place to make amends.
Finally, solicitors and conveyancers have insurance to cover the cost of any mistakes they make, but DIY conveyancers do not. As a result, consider whether the potential cost savings outweigh the risk of making a mistake.
How to do DIY conveyancing step by step
Following the below steps to allow you to conduct DIY conveyancing all by yourself can allow you to benefit from all of the advantages of DIY conveyancing above.
Focus and do not miss a trick as the failure to read a step properly could result in you not being able to sell a house correctly.
In the worst of cases, you could pay court fees for missing out steps such as the failure to pay capital gains tax or stamp duty. Doing this can lead to tax arrears which have to be paid back with interest and can be financially detrimental to the buyer.
The papers for the contract are made
When you buy a house, the seller or someone working on their behalf must give you a contract pack, which includes a draft contract of sale. This document outlines the terms and conditions of the sale, so read it thoroughly.
Aside from the contract, the seller must also provide you with official copies of the title, proving that they are the legal owner of the property. This will include a title plan that shows the property’s boundaries.
The seller must also provide more detailed information about the property, such as lease information and a list of fixtures and fittings included (or excluded) from the sale. This information is typically provided on standard forms available from legal stationery suppliers.
Property information forms, leasehold information forms, and fixtures and fittings forms are among the most common. Before proceeding with the sale, carefully review all of this information.
These forms are available by going to the law society’s website and downloading them here.
Any enquiries are dealt with
When purchasing a home, it is critical to read the contract documents provided by the seller or their solicitor. As the buyer, you or your solicitor must carefully review these documents to identify any issues or concerns you may have.
You can also ask any pre-contract questions at this point. Questions about the property, the title, and the contract itself may be included. You can ensure that you fully understand what you’re agreeing to by doing so before signing on the dotted line.
There is a search on the property conducted
So you’ve decided to purchase a home and have received the draught contracts. The next step is to conduct some relevant property searches.
It’s important to note that you get to choose which searches you run, and while skipping them may save you money up front, it may cause problems later on.
If you overlook an important issue, you may be forced to deal with costly repairs or maintenance that you were not expecting.
You can check with the council’s office or their website to find out what searches you require. They should have all of the information you require about the search applications.
If you’re not sure where to begin, you can also request more information or documents about the property from the seller.
Finally, you must decide which searches to conduct. Remember, the more information you have, the better prepared you will be to make an informed decision about the property.
Mortgages and surveys are approved
When it comes to buying or selling a home, there are numerous factors to consider. One of these is the requirement to communicate with any mortgage lenders who may be involved.
If the property is currently mortgaged, the seller must obtain a settlement balance, arrange for the mortgage to be repaid once the sale is completed, and provide the buyer with assurance that this will happen.
At this point, the buyer can also choose to have the property surveyed. This is a good idea if you want to identify any potential problems with the property before making a commitment to buy it.
If the survey reveals any issues, you should discuss them with the seller so that they can be resolved and go through a missives process here if you live in Scotland to discuss this.
Contracts are exchanged
The first thing to remember is that the conveyancing process can be complicated, especially if you’re unfamiliar with it. That is why it is critical to conduct research and ensure that you understand all of the steps involved.
Once you’ve found a property you like, you’ll need to discuss any concerns you have with the seller or their solicitor.
When you’re satisfied with everything, you can set a date to exchange the contract and the completion date. Keep in mind that a deposit of around 10% of the purchase price will be required, which will be held by the seller’s lawyer until completion.
On the completion date, you must pay the remaining amount as well as any applicable taxes (such as stamp duty) to transfer the property into your name.
After that, you’ll receive the key and title deed to your new home and you’ll finally become a rightful homeowner!
The property completes it’s sale
Completion day is an exciting day because it marks the point at which the sale and purchase becomes legally binding. On this day, the buyer must transfer the agreed-upon purchase price to the seller.
After that, the seller must send the title deeds and signed deed of transfer to the buyer and they will then be able to take possession of the property, and the seller will be required to hand over the keys.
It’s worth noting that the buyer can only move in if they want to, at which point the purchase is legally completed.
The property is registered with the land registry
There are a few tasks that must be completed after the sale is completed so the work of a buyer is not quite over.
The new owner of the property must apply to HM Land Registry to have the registered owner’s name updated and they will need to complete two forms in order to do so.
SDLT is paid
When you buy or sell a home, you may be required to pay Stamp Duty Land Tax (SDLT) unless you are exempt, such as a first-time buyer, or the property is less than the current SDLT threshold of £250,000.
If SDLT is due, you must pay it and file the necessary returns within 14 days of the effective transaction date. This is typically the completion date, but it may be earlier in some cases.
Capital gains tax is paid
Capital gains tax is a tax paid on the appreciation of the assets but in this case it relates to property. Many prefer to pay for a solicitor or conveyancer in this process because of how complicated it can get.
You need to check out the tax band you are in using this link here and only then will you be able to pay the amount you owe.
All in all, for those with experience perhaps in the legal field or selling a property they may wish to try their hand at being their own conveyancer and doing the DIY conveyancing.
In cases like this, it makes sense as you are able to learn an interesting skill and perhaps make the property transaction a bit faster in comparison to hiring your own solicitor.
Nonetheless, it is perfectly understandable if you think the risk isn’t worth it and you may come across a fault in the process of being a DIY conveyancer.