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Beware of Hidden Charges and Referral Fees

The Office of Fair Trading has concluded a detailed investigation into the housing market and has found that many people choose a solicitor on their estate agent’s recommendation.

This investigation fails to point out that in many cases the agents only refer clients to certain solicitors because those solicitors pay the agents a referral fee. These fees may be as much as £250.00 plus VAT, paid to an agent who may already be charging a substantial fee or commission for selling your house.  Provided you are notified by both the agent and the solicitors, there is nothing unlawful or improper with this arrangement. 

In some cases those solicitors who pay referral fees look to recover this expense by raising hidden charges, which may not be included or are deliberately concealed in the quotation or estimate of costs given to their clients. 

These hidden charges may be represented by additional costs that are usually only referred to in the small print contained in the terms and conditions. Unless you study the terms and conditions carefully, you will not know what these charges are until the matter has progressed and it is too late to challenge the amount to be paid. 

The hidden fees or charges that you should look out for and make enquiries about may relate to separate fees for: 

  • acting for the bank or building society providing your mortgage or loan.
  • completing the Stamp Duty Land Tax Return.
  • redeeming the current mortgage on your existing property.
  • the solicitor’s Professional Indemnity Insurance. 

When these additional charges are added the total fees charged by some solicitors who pay referral fees to estate agents, the fees are often significantly higher than those charged by solicitors who do not pay referral fees. 

Due to the significant amount of referral fees charged it is not uncommon for estate agents to put pressure on clients to sign up with “their solicitors” often being told that the transaction would be conducted “quicker and cheaper”.  Our experience is that  this is not the case and that sometimes the contrary is true.  In some cases the work is not only conducted by inexperienced and unqualified staff but is also delayed due to the volume of work and inefficiency of such firms. 

Even if you do not instruct prusinski solicitors we hope that this information will assist you in finding a solicitor who provides you with a satisfactory standard of service at a competitive rate, without any hidden charges or extras. 

At prusinski solicitors we pride ourselves in providing a professional personal and efficient service to our clients and are totally transparent with our fees. Our work comes from satisfied clients or from clients wanting an independent solicitor.

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