Estate agents back higher conveyancing fees for quicker sales

McKenzie: Wait to complete sales is ridiculous

Estate agents would “absolutely, categorically” accept conveyancers increasing their fees if it meant speeding up the process, an industry leader said last week.

The time when both consumers and estate agents accept the need to produce information on a property before marketing may also finally be here also, delegates at the Bold Legal Group conference in London were told.

Asked whether one way for conveyancers to cope with the multitude of tasks now piled on them – with the Building Safety Act just the latest – was to increase fees and reduce their transaction numbers, Iain McKenzie, chief executive of the Guild of Property Professionals, said: “Absolutely, categorically, yes – anything that can speed up the process.”

He continued: “We’re getting reports of 180 days from sale agreed to completion. I can’t think of another industry in the world where you agree to buy a product and have to wait six months for it to be delivered. It’s quite ridiculous.”

Beth Rudolf, director of delivery at the Conveyancing Foundation and co-chair of the cross-industry Home Buying and Selling Group, highlighted the role of upfront information.

“We could get rid of all of those additional enquiries caused by people chasing stuff because of conflicting and missing information if it was just collated all up front.”

She has been among those leading the push for sellers to instruct conveyancers and collate the key information before putting their property on the market, such as through the BASPI, the Buyer’s and Seller’s Property Information form.

Ms Rudolf pointed to a recent upfront information pilot run by law firm Thomas Legal, search provider Conveyancing Data Services and a leading estate agency, which reduced the time taken from agreed heads of terms to exchange of contracts from the national average of 133 days to 80 days.

This would have a “big impact” on law firms’ profitability, she suggested.

From the floor, a delegate said clients would not pay for conveyancers to start work until they had a buyer.

Ms Rudolf answered that lawyers could give clients the option – explaining the benefits – while there were some estate agents who were asking conveyancers to put a clause in sale contract to say the buyer would cover the cost.

Mr McKenzie stressed the need to educate the public – and that estate agents too needed to be braver. Many worried about being the only agent discussing it with a potential customer “because they fear losing the instruction”.

“The opposite is actually true,” he said. “If you have a skilled individual who can articulate the rationale, they’ll win.”

He added that estate agents were “at their wits’ end in terms of their cash flow” – with “huge pipelines” of sales taking additional resource – and so this was a good time to persuade them to push upfront information.

Ms Rudolf forecast that the rest of the guidance on the material information estate agents have to provide at the point a property is put up for sale would come into force in September. It comes from National Trading Standards, with the first stage introduced a year ago.

The next two phases – which will be implemented together – will require the upfront disclosure of non-standard material information, such as restrictive covenants, flood risk and other specific factors that may impact a property.

Failure to comply can lead to fines and even prison sentences and Ms Rudolf said all of the big corporate agencies would want to comply. “Estate agents are going to have to get involved,” she said.

Solicitor Shaun Jardine, the former chief executive of Brethertons who now runs law firm consultancy Big Yellow Penguin, said firms had to start putting up their prices by explaining to potential clients the value they offered. “Lawyers have forgotten what it is that we do,” he argued.

The problem for firms with a fees calculator on their website was that consumers “just choose on price, not on the value you can bring”.

Research he conducted for the conference showed that while 93% of conveyancers charged less than £2,000 on the sale of a £650,000 property, 84% of consumers said they would be willing to pay more than £2,000 – 9% said more than £4,000.

Mr Jardine said conveyancers feared losing work if they put their prices up but it usually had the opposite effect.

“If you double your prices and you lose half your work, you’ve only got a better work-life balance,” he added.

He noted too that in the same way Uber put its prices up when it was busy, so should conveyancers.

Mr McKenzie agreed, saying that cost was only a problem “in the absence of value”. Lawyers had to be, or at least employ, sales people.

A survey earlier this year found that almost nine in 10 vendors would pay more to have a faster conveyancing process.

    Readers Comments

  • Arthur Michael Robinson says:

    This will require legislation. Sellers will be reluctant to spend any money until a buyer is found and there will be some estate agents who will suggest that doing all of this isn’t necessary just to get the work.

    The legislation should require the seller of property and anyone promoting the sale of a property to have it sale ready before marketing it.

    The fundamental issue which leads to the 6 months statistic from “sale” to completion is the fact that too much too often has to be sorted out once the sale is agreed.

    I also think that we need a new term other than “SOLD”. Something like “if all goes well this property may sell in a few months” or “here’s hoping”.

    Estate agents should convey on Sale Preparation rather than Sale Progression and only list a property when it is Sale Ready.

  • Sarah Charlton says:

    Two observations:
    1.How does taking advantage of a client’s situation to push prices up when there is a ‘boom’ sit alongside ethics?
    2. Perhaps law firms might be better resourced in both people and technology if they weren’t paying such large referral fees to estate agents.
    We don’t pay them but I know so many law firms who are paying significant sums of money!

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