No buyer will get near the front door of a new home without paying substantial legal bills. The principal outlay is on conveyancing, or checks carried out by solicitors on the title deeds of a property.
The typical charge for the service is 1 per cent of the purchase price, plus £100. For example, such a fee on a home costing £150,000 would amount to £1,600. This is no insignificant figure and the money must be raised independently of the deposit on the property.
But many buyers of homes in new estate developments are securing reductions of these fees by approaching a solicitor who has already completed an examination of the title deeds on the development.
The theory is that the deeds on houses in many large developments are the same, so solicitors do not have to carry out separate examinations of individual deeds. The solicitor passes on the saving to new clients in order to generate goodwill.
One Dublin solicitor who offers this service accepted that the practice is sometimes frowned upon by competing firms who charge the full rate, but she said first-time buyers are often dealing with lawyers for the first time too. While conveyancing is not particularly lucrative for solicitors, she said new customers often stay with the firm when doing other business.
Lawyers offering the service often charge 0.5 per cent of the property's value, plus £100. It is common for more than one firm to offer this service at a particular development, she said. This fosters transparency.
According to Gerry Leahy of Leahy New Homes, 30 per cent of customers entered such arrangements when buying property from his company last year.
"What the solicitors are doing is discounting for volume." Buyers could save between 30 and 50 per cent of conveyancing fees, he said.
Mr Leahy said he had acted as a conduit between property-buyers and solicitors, but would only recommend the services of a respected legal firm with whom he had done business previously. He added that the service was feasible only with new property, as the deeds on second-hand homes will vary according to their ownership history.
However, the chairman of the Law Society's conveyancing committee, Brian Gallagher, warned that buyers should always seek personalised advice from their solicitor. Despite having the same deeds, borrowing arrangements on properties will always be different.
"There's certainly a reduction if one person acts for ten, but you have to look at the quality of service," said Mr Gallagher, who is a solicitor in Dublin. "What quality service would be provided to each purchaser in terms of advice?"
PEOPLE buying property should always seek advice on the tax and legal implications of the purchase, he said. For example, parents giving a gift of money for a deposit should sign a document saying they won't have ownership rights on the property.
Mr Gallagher also warned against solicitors acting for building firms and for purchasers. This could expose home-buyers to "unfair" provisions in purchase contract, such as a requirement to carry out final checks on the property itself within three days of receiving a contract.