Over six months ago the National Trading Standards Estate Agency Team revealed new industry guidance to make referral fees more transparent to consumers:
Failure to disclose referral arrangements may render an estate agent liable for criminal prosecution under the CPRs and/or action by NTSEAT for warning or prohibition under the Estate Agents Act 1979.
The Government wants referral fees to be transparent and would consider banning the fees if this could not be achieved by the industry.
Current indications are that not all estate agents are making their referral fee arrangements more transparent.
A consequence could be a referral fee ban across the board, and a total referral fee ban would probably have a significant financial impact on thousands of estate agencies and a high number of conveyancing firms.
In addition and as a result of the Government’s Call for Evidence, the possible introduction of Reservation Agreements and providing more information up front (don’t mention the word HIP!), will also have an effect on the way conveyancers and estate agents work together.
I am currently selling a property (not my own, but that of my late mother) and the lack of communication and chain transparency between all parties involved is lamentable.
I am now experiencing the frustrations that many home-buyers and sellers are facing.
I am feeling, like them, that their transaction has fallen into a black hole and everyone is working in their own sealed silo.
However, having worked at the coalface of conveyancing for 30 years I know how good and helpful a harmonious relationship between agent and conveyancer can be.
Although easy to develop, these good working relationships are, it would seem, few and far between.
* All of the above issues (and more) will be covered at the Bold Legal LIVE! conference taking place in London on October 18, and the doors are open to estate agents as well as conveyancers.
I am selling my late father’s property, and because of the attraction of referral fees over actually recommending a quality conveyancer, I have made it crystal clear to the estate agent (1) not to recommend any law firm to the buyer without my prior consent and (2) that no offer will be accepted from a buyer who uses a factory style conveyancing firm.
In addition, and so rare from estate agents, when they recommend a buyer to me, they need to button them down an agreed timescale – and informing me of the complete conveyancing chain (so, as I do for my cleints already) so that I can then liaise with them all in a single email so we know who we all are.
Price, timescale, quality of conveyanecr, and who is in the chain, are all of equal importance.
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Not too sure you need an Estate Agent as you appear to want to do their job for them? Thank goodness you are not a customer of mine as we certainly wouldn’t have thought to check out the chain first and advise you accordingly. Time scale ( even though a completion date is never our responsibility) nope don’t discuss that either and give you the contact details of everyone else in the chain? Err yes right. We won’t bother checking out the buyers finances then and if anyone else in the chain below is using a ‘ Factory style ‘ conveyancing firm ( whatever that is ) I assume you won’t want to sell to them either. Anything else m’Lord?
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Sounds like I wouldn’t be a customer of yours, no.
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“so that I can then liaise with them all in a single email so we know who we all are”
TwitterSalisPropNews – So glad you’re not my client!
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as in liaise with all…..the conveyancers, once I know them.
Of a chain of 4, 3 conveyancers will instantly reply, and the weak link is immediately identified, and then the rest press.
It works a treat, every time.
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I agree that a referral fee ban would have a impact, but are we certain this would be entirely negative? Conveyancing, as an industry, is stuck in a rut. It is hard to see how this will improve unless market forces change.
The large corporate agents make huge sums from the panels they run. They aren’t going to simply give that revenue up with a shrug. I’d expect them to each purchase at least one of the existing medium sized volume conveyancers and refer their clients there. This would be a simple sell and is a model with a history of success (CWPL for example). I wouldn’t expect these large agents to suffer financially in the medium-long term.
Nonetheless, volume conveyancing in it’s current form would be a lot less attractive. Without the security of referral agreements bringing in work, the overheads involved would be riskier. A lot more work would be obtained by reputation; to improve this, many would need to improve their service. This would result in more investment in training and, over time, standards may start to improve.
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In my considerable experience the worst thing you can do at the very outset of a transaction is set a completion date to work to. As anyone involved in the process knows there are too many imponderables which can affect the speed of the transaction, for instance you might know the details of a chain but have no information as to the legal title and whether it is complicated enough to affect timescales. Once you set a prospective date and miss it for whatever reason that is when the clients start to get stressed. Far more prudent and in your clients best interests to talk completion dates only once the whole chain is in a position to proceed, and let the Agents do their sales progression job and liaise with them. Concentrate on getting your clients ready to exchange asap and let others do their jobs, you don’t get any more brownie points for chasing a chain when it is not your job.
In any event there may be Data Protection issues involved with passing information on to people up the chain. I never speak to Solicitors who harass me from further along a chain for precisely that reason, let alone that I would probably not have clients instructions to speak to them anyway.
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