Do I pay a solicitor if the sale falls through?

The rule

You only pay for professional services once the transaction proceeds. If you decide not to move forward, or the other side does, no professional fee is charged for the work done up to that point. That applies to purchases, sales and mortgage switches alike.

Service by service

• Buying. You can withdraw at any time before contracts are signed and exchanged, for example if your loan approval falls through. Your deposit should be fully refunded and no legal fees are charged for the work done.
• Selling. No professional fee if the sale does not complete. You cover only the outlays already paid on your behalf, such as searches that were already carried out.
• Mortgage switch. No charge if you decide not to proceed.

Why the distinction between fee and outlays

The professional fee is the firm’s charge for its own work, and it is waived. Outlays are money the firm has paid to third parties on your behalf, such as search fees or a certified copy of the folio; on a sale, those are the only sums you are asked to cover if you do not complete.

The deposits

The booking deposit paid to the estate agent at sale agreed is refundable and commits you to nothing. The contract deposit paid when you sign is part of the purchase price, and from the moment contracts are signed and exchanged the sale is legally binding on both sides. Where a purchase carries a specific risk, a special condition can preserve your right to walk away: in one recent case, the right to withdraw and recover the deposit if a tenanted property was not vacant by the agreed date.

The exception: auctions

At auction the contract is signed on the day your bid is accepted and the deposit is non-refundable, so the legal checks have to happen before the auction rather than after.