Are you being bought?
The market place for residential conveyancing services is highly competitive. However, the apparent benefits of competition (maintaining high levels of service and economic fees) are being skewed by firms of licensed conveyancers or solicitors paying estate agents for clients referred to them.
Woolley Bevis Diplock LLP does not pay referral fees to estate agents for residential property work. We offer all our clients a highly specialised independent and bespoke conveyancing service designed to meet all their needs.
Two recent articles in the Mail on Sunday by its property editor, Sebastian O'Kelly; (i) 'Is your estate agent taking 'bribes' from your lawyer?' (22/02/10); and (ii) 'It's time to end agents' kickbacks and their rip-off fees' (01/03/10) have highlighted this practice which, unfortunately, is widespread amongst both professions.
Referral fees, whether generated by a firm's in-house policy for gathering-in work, or demanded by estate agents for recommending clients can result in biased commercially motivated advice which may not necessarily by in a client's best interests. Instructing a conveyancer who is involved with estate agents in this business can result in a conflict of interest for your supposedly independent legal advisor - there may by legal problems with your new home that need to be addressed or would make it unwise to buy. However, a conveyancer who identifies these issues may find himself at risk of losing further referral work from the estate agent.
Some firms pay as much as £300.00 to estate agents for the client's business. Unsurprisingly the Office of Fair Trading has reported that 56% of sellers and 46% of buyers choose their conveyancer based on the advice from the estate agent.
Estate agents are the specialised professionals who help to sell your home. Additional services offered to both buyers and sellers habitually involve kickbacks, hidden fees and poor value. Prudent buyers and sellers are wise to source their solicitor, financial advisor, home information pack and surveyor from independent suppliers of their own choice.
There are clear guidelines from both the Solicitors Regulation Authority ('SRA') and the National Association of Estate Agents which require both solicitors and estate agents to inform their clients of any referral fee paid. However, the SRA has found that there is a significant lack of compliance with the rules.
Whether you are buying or selling, always ask about any financial relationship between your agent and the solicitor they recommend and remember it is your right to choose who your solicitor is. Otherwise, you may find yourself not being served but being bought.
To discuss this or other areas relating to residential property, please contact one of our specialist property team on 0845 267 0241.
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