Referral fees are taking a back seat, says movewithus boss

Monday 5th September 2011
Written by Rosalind Renshaw

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.

(4) Comments

Added by michael on 2011-09-05 17:17:46

Surviving on HIPS referral fees? Borrocks, I never took any fee for HIPS & don't for EPC, instead passing the discount to clients & getting top service from my providers for referring so much business to them.

I DO get a referral fee from some conveyancers, but again refer them so much business that they both discount to my clients AND give them good service AND operate 'No Sale/Purchase No solicitor fee'. That works.

I agree, comms between agent & conveyancer are paramount.

The repo terms offered by Move with us are, in my opinion, so onerous that I have never agreed to be instructed by them. I wish more agents had the borrocks to tell them (and many other repo companies) the same. I offer a good service for a fair fee and, due to a good local reputation, do not need to agree to their excessive demands and low payment ... I hope I'll still be able to feel the same this Winter though!
Added by FSA insider on 2011-09-05 11:10:52

How interesting that Move With Us is happy to share with the industry that it acts chiefly as a source of repossession instructions to its existing panel of selling agents. The current requirement is for asset managers to source the most suitable selling agent in each area specific to each property using independant data such as Vizzi homes. This ensures that each customer is treated fairly in line with TCF requirements and is allocated a selling agent on a fair basis, not allocated a selling agent just because they have paid a fee to Move With Us to be on their panel. I am sure their client base of mortgage lenders who supply the repossession instructions would be very interested to hear that their properties arent being allocated to the best agent in the town, instead simply allocated to whichever agent is willing to join the move with us panel and pay a joining fee. A TCF complaint in the making me thinks ???
Added by Tweet - SalisPropNews on 2011-09-05 10:07:49

The quality of an Estate Agent's relationship with conveyancers remains paramount - http://bit.ly/r3B05o - this is basic, and it is so pleasing to finally see it coming across.

Align with those law firms who show a hunger for the same goal as the Agent and customer - a prompt smooth move - where the conveyancer knows what they are talking about personally, not some head-set wearing monkey who is not qualified in the law, yet charges the customer the same fee as an actual solicitor. A conveyancer who regularly keeps in touch, is always at the end of their personal telephone number, and who doesn’t go home early.

How depressing it is that so many people think they have an actual solicitor acting for them, but in fact they barely have someone out of their last job stacking shelves.

I cannot see how some outfits - well known ones too - who pay huge referral fees, or have financial ties to the Estate Agents are offering best service to the public.
Added by Rob Hailstone on 2011-09-05 08:10:47

Great news. Never paid my agent contacts a referral fee but was available nearly 24/7 and did all I could to speed matters up as long as it was in the best interests of the client. Contacts always said saving a fall through by expediting whenever possible was worth much more to them than a referral fee. In my opinion, definately the best way to get more out of the conveyancer.

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