Selling a home is not a quick and easy affair. You often have to wait weeks, or even months, because of the amount of paperwork involved. It is why many people hire solicitors to handle the transfer for them. When choosing a conveyancing solicitor, one of the things you must check is whether they are a member of your mortgage lender's panel. If they are not, and you hire them, it could cause delays in your move.
When you purchase a property through a mortgage, you have to ensure that the mortgage loan is 'secured.' Failure to keep up with mortgage payments means the lender can repossess the property and sell it. They need to do this because they must recover the outstanding loan. It is why buying land or a house with a mortgage requires plenty of checks—lenders must ensure that the property offers legal security for the money you're borrowing.
What is a ‘Good and Marketable’ Title?
Mortgage lenders must be confident that the property has a 'good and marketable title.' It is so they can easily facilitate a sale if it is necessary. To be considered marketable, a property should have no legal issues that can impede a sale.
Confirming marketability involves registering the mortgage as a 'charge' against the title, confirming the property value, and determining whether it is enough to cover the mortgage, lender costs, and interest. A 'good and marketable title' will ensure that the titleholder can sell the property without legal issues. The conveyancer must also register the mortgage as a legal 'charge' against the owner's title, recorded at HM Land Registry.
What is a Mortgage Lender Panel?
Mortgage lenders usually have a panel of solicitors who can act on their behalf during a property purchase. In many instances, lenders will only work with conveyancers or solicitors on their panels. If your property specialist is not on your mortgage provider's list, you could experience delays in the transfer.
There are over a hundred mortgage lenders in the UK to complicate things further, each with specific requirements that conveyancers must fulfil. What's more, you don't want to be working with a solicitor firm that isn't on a panel of any lenders—typically, panel membership is a good indicator of a firm's competence.
It isn't easy getting on a lender panel. Some companies require partner firms to have three or more partners, while others only work with solicitors who handle a good volume of residential conveyancing. Other lenders even require that their partner firms have an accreditation from the Law Society's Quality Conveyancing Scheme.
What if My Solicitor is Not on My Lender's Panel?
If you've started the conveyancing process and find out that your conveyancer and lender cannot work together, you would have to replace the solicitor with someone on your lender's panel. Your current conveyancing solicitor will have to make arrangements for the transition, including creating a file on your behalf which the second solicitor can use.
You could also get a professional whom your lender recommends. Both situations represent delays in conveyancing. What's more, if you have to change solicitors, you have to pay additional legal fees. Prevent this from happening by researching whether your conveyancer is on your mortgage lender's panel before hiring them.
Should I Hire a Broker-Recommended Solicitor?
When you get your mortgage through a third-party agent, you could also get recommendations for solicitors from your broker. Note that besides the convenience of having one less step to attend to on your own, you aren't getting other benefits from hiring your broker's recommendation. Firms that your agent vouch for won't charge you any less than professionals whom you find yourself, and the broker or agent will get a commission from their fees. Brokers should inform you of these agreements in case they exist.
Should I Hire an Estate Agent-Recommended Solicitor?
Often, real estate agents will also give you the names of conveyancing solicitors you might want to hire. Agents often have the client's best interests at heart—perhaps this particular firm is efficient or someone they had worked with in the past.
They could also be after a referral fee, which doesn't affect the sale either way. However, if you take your estate agent's recommendation, ensure that the solicitor is still on your lender's panel. Otherwise, you'll run into the same problems above.
What Happens if I Don't Check Right Away?
The first thing to remember about hiring a property professional is that you shouldn't assume they'll automatically check if they can work with your lender. It is rare for them to ask about your lender until well into the conveyancing process. Many firms don't have a central list of which lenders they are part of. At times, their inability to represent the lender surfaces only when the lender makes a mortgage offer.
When solicitors discover that they aren't on the mortgage panel, they have to find another firm at the last minute, one capable of handling the legal work. These things cause significant delays, which could put the sale in jeopardy.
You can be proactive about preventing these situations. First, when you're thinking of buying a home, you must also think of your choice of conveyancing professional. Planning way in advance lets you compare quotes and find someone on your mortgage lender's panel. Often, firms work on a 'no sale, no fee basis. As such, it's a good idea to meet, verify, and instruct your solicitor before closing.
If you already know who your lender is when you're choosing a solicitor, you can outright ask them if they are on your lender's panel. When deciding among several mortgage providers, check if they are on all of their panels.
What Should I Do if the Conveyancing is Underway?
In the early stages of conveyancing, you must contact your solicitor and verify that they can work with your mortgage lender. You should ask them to confirm that they are qualified to work for your lender. If you have only just instructed someone, it's probably too early to find a new solicitor. Thus, you need to confirm your solicitor's process.
Solicitors must be ready to send the conveyancing information to your alternative firm when you receive the mortgage offer. Make sure you secure an undertaking from your current solicitor stating that using the second firm will not result in further delays.
Finally, when you're already working with the new conveyancer, don't assume that they'll consider your file as urgent. You must be prepared to update and follow up as frequently as possible to ensure that they prioritise your property's conveyancing.
Conclusion
Purchasing property isn't as easy as signing a document and shaking hands on it. When you agree to a sale, you have to ensure that you have the correct documents, follow the protocols, and hire the right people for the process.
Compare conveyancing fees with Conveyancing Calculator and take the first steps to selling or buying your home. Our buyers and sellers can save hundreds of £s through our services—we provide all-inclusive quotes containing VAT, disbursements, and a complete breakdown. Find a solicitor today or contact us for more information.
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