Referral fees are taking a back seat, says movewithus boss
Monday 5th September 2011
Estate agents are increasingly looking for a quality conveyancing service, rather than simply one that delivers referral fees.
Sean King, CEO of MoveWithUs, which has a panel-managed conveyancing business, said: “Our agents are telling us that they would prefer to offer a conveyancing service which is timely and reliable, and ensures that the sale progresses to exchange, rather than simply referral fees.
“It is quite a change of sentiment – although we do, of course, still pay referral fees, normally in the range of £150 to £200 per file.
“However, the change makes sense. Agents need to be able to make the sale in the first place, but it is equally important to control the progress of that sale.”
King believes that the change in attitude has been slow to form, but understandably so: “HIPs were a disruptive factor in the housing market. Agents did not like them, but HIPs did make it easier to introduce conveyancing.
“Once the housing market crashed, it was – ironically – the cashflow from HIPs referrals that kept many agents going.
“When HIPs were revoked last year, it pulled the financial rug from many estate agents. At a time when they had not been selling much property, they had still been making a margin from HIPs.”
Now, he says, agents who make sales are much more focused on getting the sale through safely and quickly, so that they can get their fees sooner. “The proposition is moving from it being about revenue, to delivering a better performance – for both the client and the agent. The demand is for greater speed and certainty.”
King said that some 350 estate agency offices use the MoveWithUs conveyancing service, which has just over 100 solicitors on its panel.
Both the numbers of conveyancers and estate agency users has grown this year, said King – although with over 1,100 MoveWithUs member agents in total, only around one-third use the conveyancing service.
He thinks the lowish take-up is because there remains a perception that the local high street solicitor is the better choice – and market share remains 80% in favour of the high street conveyancer.
But King disputes – as you would expect him to – that the high street is necessarily the better choice: “Local solicitors do not have to meet the targets and quality standards of a panel.
“Also, some agents are still not confident about incorporating a conveyancing service into their offering. They see it as giving them a responsibility, which not all want. The mentality is, ‘If I don’t refer, I am not responsible’. Time is short, so the temptation is just to focus on the property sale and ignore the importance of getting the legal parts done.”
King said that the MoveWithUs conveyancing business has enjoyed its most successful year for some time with Beals, Peter Alan and now Andrew Craig choosing the service; he is keen to encourage all independent agents to consider their own conveyancing arrangements.
King said that the firm, which has been three times in the Sunday Times Fast Track list of rapidly growing companies, continues to grow at the rate of 20% a year. It currently employs just over 300 people.
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