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TODAY'S OTHER NEWS

Online agents and bucketshop conveyancers ‘causing transaction delays’

One of the country’s top buying agents is advising purchasers and vendors to avoid online agencies and 'bucketshop' conveyancers.

Edward Heaton - founder and managing partner of buying agency Heaton & Partners - says onliners are one major reason why many transactions fall through. 

“In my opinion online estate agents who charge up front fees for their services simply don’t have the motivation to get properly involved in following chains and successfully seeing transactions to their natural conclusion. Many of these online agents also lack proper industry experience” explains Heaton. 

“High street agents are not without their faults, but at least they will generally work hard to make a deal happen and there is usually someone in the office who has some decent experience” he continues.

Heaton says he knows of the risks of fall-throughs at first hand as he recently had to sell his mother’s home.

“The problem was exacerbated by the fact that one of the law firms was an online ‘bucket shop’ conveyancer. They go through a tick box exercise and if there is anything out of the ordinary with the property, they often don’t deal with it properly” he notes. 

“With a traditional firm of solicitors there is normally a partner who will get involved with anything complicated or out of the ordinary and be able to give sensible advice.”

Heaton - one of the country’s highest profile buying agents - says: “Essentially, if you are a seller or buyer wanting the process to go smoothly and quickly, my advice would be to use a traditional high street estate agent as there will always be someone to help you navigate problems that may arise. 

“Likewise, I would suggest using a proper solicitor so that you have a partner-led service rather than the ‘bucketshop’ conveyancing experience. The reality is that chains are complex and things often do go wrong at some point. As with all things in life, you pay for what you get.

“There seems to be a race to the bottom with ever cheaper fees for both conveyancing and estate agency. This fundamentally ends up with buyers and sellers not getting the advice and support which they inevitably do need in the process.”

He says some 67 per cent of sales are part of a chain and around one in three fall through before completion. 

His own experience selling his mother’s home involved him being at the top of a five link chain in West Berkshire. 

The sale of his mother’s property was agreed in July but the person at the bottom of the chain, a first time buyer, had been waiting to buy the flat at the beginning of the chain since October 2019.

Heaton continues: “By [last month] all parties in the chain thought they were ready to exchange contracts, but it then transpired that the first-time buyer needed new local authority searches as they were out of date, which would have meant another 45 day delay. 

“The first-time buyer had been waiting so long to buy the flat that she had needed to obtain a new mortgage offer as her original one had expired. Sadly her solicitor failed to pick up on the need for new searches until the very last minute.

“If we had waited the 45 days for new searches to come back, the mortgage offers of other buyers in the chain would have expired so they would have needed to make completely new mortgage applications. It looked like we were facing a never ending cycle of delays, so we decided to buy the flat at the start of the chain to enable the rest of the chain to get moving.”

Heaton plans to sell the flat to the existing first time buyer on the same terms they originally agreed and he is now waiting the 45 days for the searches to come back.

He concludes: “The fact the chain ever found itself in this position is down to a combination poor communication, a lack of experience and general disinterest from some of those involved in the chain. This is increasingly common scenario and is down to two elements, one being online estate agents and the other bucket-shop conveyancers.”

  • Rob Hailstone

    “I would suggest using a proper solicitor.” Wow that is a very incendiary comment.

    Yesterday another agent posted the following:

    “There are no 'good' conveyancers, the best you can find is the best of a bad bunch the industry needs shaking up full stop.”

    I have been in this business over 40 years and (when conveyancing) worked very well with many agents over the years. However, there has always been a constant, usually well intentioned (and sometimes humorous), dig at each other’s abilities and professions.

    On the whole, my 30 years at the coal face were challenging, but fun. Working with my agent contacts, we made things happen. I feel sorry for the hard working agents and conveyancers today, who seem to lack the camaraderie that I was fortunate enough to experience.

    The acerbic comments passing between the two professions these days takes the animosity to a new level, and is disappointing to see from the inside. God knows what the general public (and others) think.

    In my opinion, this situation really needs addressing. It is unhelpful and unedifying.

  • Daniel Hamilton-Charlton

    Whatever happened to relationships and understanding.
    During my extensive spell on the front line in estate agency I had close working relationships with conveyancers. We went out for lunch, discussed the market and and challenges that we were having so that we could continue to enjoy a good working relationship. (I know we are in a pandemic and at the moment it is not possible but I am not just talking about the past 9 months.)
    It appears that very few Estate Agents take the time to meet with "the other side" and see them more as a service provider than a partner in business. It is very sad to read the numerous derogatory comments of the profession.
    To me, unfortunately, it smacks of laziness or unwillingness to build relationships and get to understand what is going on over the fence. Agents have been driven by referral fees more than service, when actually the relationship should have been built on service and then commissioned when appropriate.
    Estate Agents are running a business that has many integral parts to make it work well. Unless you take an interest in all those parts and a desire to understand how they work, you might as well be driving a car blindly up the M1 and blaming the other drivers for being in your way.

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    Very well put Sir. Too many agents are completely blinded by the fees they can earn by referring clients to conveyancing firms rather than forming a good old relationship with a company local to them. Then, we all blame the conveyancing industry for not getting our sales through on time.

    If we just work together, surely we can all get this sorted.

     
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    Whilst I accept it seems open season on conveyancers at the moment to merely brush it off as something that needs to stop misses the point in my opinion. There is considerable merit in the points being made here and sadly a lot of truth.
    Conveyancing standards have never been lower and unfortunately the busier than normal market conditions at this time are bringing to a head the lack of experience and competence of much of the profession. That point is unarguable. The last recession in 2008 took a generation of experienced able conveyancers out of the profession and they have never been replaced.
    I don’t like to see my peers constantly complaining on social media it’s unbecoming and embarrassing but it’s never ending at the moment. Those of us who have seen this before just put our heads down and crack on.

  • Iain Harrison

    Hello, welcome to the 20th Century, oh no, wait, we did that one...Edward Heaton is totally living in the past and fails to address the real problem which is not necessarily the type of firms involved, solicitors or conveyancers, it's the fact that the system is broken and too many people just go along with it and react, blame the system, let's not bother to change it, let's still close between 1-2pm, let's knock off at 5pm, let's go on holiday for two weeks and except our clients to have to wait because nobody else will deal with the file. let's take on too many cases so we can't handle them properly, let's not do anything proactive as it doesn't matter because we've not hit the average time yet so have plenty more weeks to waste playing golf, having lunch and writing letters...

    Daniel Hamilton-Charlton

    Wow. Lets a lot of pent up frustration. Would you like any help pairing up with a progressive law firm Iain? We don't offer any panel solutions, but are very well connected.

     
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    Reading this article, I can hear the gentle sound of wings fluttering, as squadrons of chickens return home to roost.

    I have been undertaking conveyancing for decades and during this time I have seen both the best and the worst of conveyancers and estate agents.

    In an ideal world, solicitors look after their client’s best interests for a reasonable fee. In the same world, estate agents provide a vital service, holding chains together by correcting misunderstandings or unblocking logjams.

    In the real world:
    • Sadly, some badly trained, target obsessed factory line conveyancers only make things worse when problems occur
    • Some estate agents put extraordinary pressure on solicitors to ignore defective titles, or to accept the ridiculous demands of aggressive developers.

    The best approach in the current SDLT inflamed scenario is a collaborative one, and it is a pity that some involved in what is already a stressful experience for clients, don’t appreciate this fundamental fact.

    Iain Harrison

    Stephen - never met an estate agent who would put pressure on a solicitor to ignore a defective title, sadly I have dealt with many of the sweatshop factory conveyancers who offer cheap as chips conveyancing, but also some of the old fashioned solicitors really should have retired long ago and are so out of touch with modern ways of working that they cause as many problems as the online conveyancers...and these are the firms that Edward Heaton recommends a client uses, great if you want a cup of tea and biscuit with your service and have an extra three months to wait because the gold course just can't wait...

     
    Daniel Hamilton-Charlton

    I'd like to build your business, for Free, 'Collaborative Conveyancing Solutions' online pages to work smarter with your regional estate agents and start to build better collaborative environments for the benefit of the client.

     
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    I have definitely seen Estate Agents pressure Solicitors into accepting defective titles. At a firm where I worked I advised a client to withdraw from a purchase because the title was unmortgageable. A telephone call to my senior partner telling him there was a lot of work passed to our firm by the Agent that would go elsewhere if I didn't change my professional opinion led t the file being exchanged the following day. That was not an isolated instance of said Agent putting pressure on with a threat of referrals being withdrawn. Those of us with long service in the profession will all have seen examples of nefarious conduct.

     
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    I couldn’t agree more. I am extremely lucky to operate in a rarefied market where I deal with the some of the very best conveyancing solicitors in the industry (who I appreciate charge accordingly). Our typical exchange of contracts is between five and ten working days, often less. Even where our client requires debt it is extremely unusual for an exchange of contracts to take longer than twenty working days. The deals my firm puts together always involve a collaborative approach between all parties and we have great relationships with many amazing solicitors.

    I accept I may be a dinosaur living in the past, but my recent experience was a genuine eye opener to the plight of the mainstream house buyer. I found it extraordinary that there was a first time buyer who essentially had no one to hold her hand through the process – the online agent simply wasn’t interested and her conveyancer provided no advice or guidance. She had been trying to buy the flat for over one year, yet my own solicitor (who acted in my purchase of this flat) exchanged contracts on the same property in under 48 hours! It simply shouldn’t be like that.

    I fail to understand how a client is best served if the only way to communicate with a conveyancer is by using a generic email address which will normally be responded to within 48 hours? This is what I mean by the race to the bottom. Solicitors (and agents) need to speak with each other, but ever cheaper fees are forcing large conveyancing firms to create a system that works for them whilst still delivering a profit. In my view this is at the expense of the client. I appreciate many traditional firms of solicitors have had to follow suit to some extent in an attempt to compete on fees, but at least there is usually someone there who will answer the phone or an email, plus a partner on hand to provide guidance where required.

    I do accept the comment that the whole system is broken and the fault does not simply lie at the door of certain types of either estate agent or conveyancer. However my personal experience suggests they are both a significant part of the problem.

     
  • DAVID JABBARI - SOLICITOR AND CEO OF MUVE

    There is no doubt that law firms which transact 400 Completions per month will have to work harder to consistently ensure quality than the High Street law firm doing 4 a month. But it is actually a lot more complicated than that. It is a bit like saying that you can satisfy all your food shopping needs from a small Deli. The truth is that the economics of conveyancing demand scale, and indeed it has been the large conveyancers that have kept this market open while the High Street firms have gone into all sorts of financial meltdown post-Covid. This is because the big firms have funds to invest in new and better processes and can also ride out the ups and downs of the business cycle. Doing anything on a large scale will have teething problems but all the data suggests that this is an irreversible shift in this corner of the legal market. 10 years from now there will be 3 or 4 large conveyancing providers which will dominate a good 30-40% of the market and really be the only credible partners for large referrers. They will also use technology and their funding to improve services significantly beyond the High Street model. Yes of course the small High Street shop offering a client the personal attention of a lawyer will always be attractive but unless customers wish to pay double the fees (and whether we like it or not customers don't) this model will largely disappear.

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    Iain and David
    I worked for a digital law practice for several years and I stand by my comments. There is little point in "scaling up" if there are hefty negligence claims down the line. Solicitors can be sued for a period of up to 15 years after the event!
    Interesting to note, that I received an email the other day to the effect, that Co-Op legal services are inviting Co-op members to instruct them on defective leasehold conveyancing.
    I have met plenty of law firms able to combine volume with professionalism, and it is fallacious to suggest otherwise.

  • Iain Harrison

    Alan Murray - pretty poor of your senior partner to give in just so they keep their referrals from the estate agent, must have been desperate for business...shoddy practice and clearly not working in their client's best interests, pity that they weren't reported to The Law Society...

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    He did not say they did give in

     
  • Iain Harrison

    The file exchanged the next day...

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    The file did exchange, purely a commercial decision based on greed by the senior partner.
    To end the story I left the firm not long after that incident as I could no longer work for a firm who thought nothing about what was best for their clients. The firm crashed and burned a few years later, the culture of greed on which they existed eventually consuming them. Somewhere there is a moral to the story.

     
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    I personally will never instruct anyone i can't meet. There are always problems and issues to sort and more than ever in these times.

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