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Business, brokers and bear traps

Conveyancing can be a nightmare, for homebuyers and for estate agents, too, says Richard Reed. When a sale falls through – one in three don’t make it to the line – that’s not just lost commission, but lost time.

Richard Reed

Link to Conveyancing feature

Solicitors have a reputation for being slow, difficult to pin down and offering poor feedback on progress, causing havoc to sales chains.

How many of us, as buyers or sellers, have resorted to chasing the legal team ourselves, week-in, week-out? Pity the poor agent stuck in the middle.

But times they are a-changing – and a new breed of conveyancing ‘brokers’ is emerging, offering not just a quick, efficient house-buying service – but a new revenue stream for agents.

Solicitors have been regarded as “disposable” by estate agents. “After six months or so, the solicitor will fail to deliver and there is a big fall-out.

These ‘panel managers’, as they are known, pre-select a group of solicitors who guarantee a speedy, responsive service.

They use technology to keep track of critical milestones in the conveyancing process, such as local authority searches. But crucially, they also use their own staff to respond to queries about case progress and will chase solicitors themselves to ensure a quick resolution.

Relationships, protocols and tech

Link to Conveyancing featureCarl Brignell, Managing Director of Elite Conveyancing, says that historically, solicitors have been regarded as “disposable” by estate agents. “They will have a relationship for six months or so, then for whatever reason, the solicitor will fail to deliver, there is a big fall-out, and they will go to the next firm – and this happens constantly,” he says.

“What none of them are doing, and what we are trying to do, is learning from those mistakes and building on those relationships.”

Agents using Elite are also paid a ‘finder’s fee’, usually around £200, to encourage them to recommend clients – a marketing tool used by most panel managers, while clients typically pay £600-£700 before disbursements.

Price competition in the market has also had a negative impact on quality of service, as big conveyancing ‘warehouses’ compete for customers, says Brignell.

“There are two types of panel managers. There’s the type that just want to feed the warehouses, the big conveyancing specialists – some may offer cheaper fees to panel managers, so the manager will always try to use them because they make more money.

“The other model is they just sign everybody up – managers with 200 law firms on their panel.

Each law firm will maybe receive one or two cases a month, which means they have absolutely control and no relationship with them whatsoever. It’s a bit like flipping through Yellow Pages.

“What we do is have a very intimate panel of solicitors and we have strict criteria for choosing the right solicitors.”

Brignell says protocols on how to deal with different issues that might typically crop up will be agreed with conveyancers when they join the panel, rather than waiting for things to go wrong. “We will get them round a boardroom table and thrash out what happens, for example, if a FENSA certificate is missing and an indemnity policy is needed – we will say, ‘Let’s agree now which side is going to pay for it’, because in the absence of such an agreement you find the solicitors will argue for two weeks about who is going to pay.

Beware of the bear traps

Link to Conveyancing featureAll our experts agree on is the importance of customer service, not being over-reliant on technology to manage the process. “In terms of brand positioning there’s a real issue between technology and customer service,” says Richard Curtis, business development and marketing manager at The Conveyancing Exchange.

“We recognise people are looking for both, and try to bridge that gap between technology and customer service. We have the technology but we also have a sales support team, seven days a week, because the tech is only as good as the service behind it.”

Conveyancing can be a complex process, with plenty of potential bear traps. “That’s why customer service is absolutely critical and should only supported by technology,” adds Curtis.

The company is able to use its leverage with solicitors on its panel not just to get reduced prices but also improved service levels, and can use technology to track performance. “We will only accept very strict performance criteria. We vet solicitors on our panel and will remove anyone who doesn’t meet our standards.”

The Conveyancing Exchange does not claim to be the cheapest firm, but it is certainly not a premium service, with client fees of roughly £700. “We market on quality and efficiency – we are value-led, not price-led,” says Curtis. “We think people are prepared to pay for customer service and communication.”

Relationships and referrals

That communication goes, critically, to the agents too, keeping them in the loop on progress, helping to chase solicitors rather then leaving it to the buyer or seller. Agents receive a referral fee of roughly £300 per instruction, with a user incentive offer of £50 or £100 Amazon vouchers if they hit targets.

Link to Conveyancing featurePeter Joseph, CEO of The Moving Hub, agrees that it is vital to have good working relationship with conveyancers. “It’s about contacting them every day about capacity levels, if they know they have something coming up that will affect their service levels, we need to know so we can manage it.”

The Moving Hub has an online portal where estate agents can see milestones being updated, and they’re copied in on every email that goes out to clients. “A huge amount of money is spent on technology and IT,” says Joseph. But he stresses that customer service is paramount. “We have two paralegals in house and they’ve got admin back-up, too, so if an estate agent needs a very quick response and can’t get through to a conveyancer, we jump on it and give them the answers they want; that’s all part of the service.”

The Moving Hub goes has a bespoke homebuyer’s protection insurance so that if a purchase falls through, the buyer gets their money back on searches and other up-front costs. “Where they would have lost that money they get their money back within a week,” says Joseph.

“It allows the estate agent to hold on to that client and find them another property, and allows the buyer to carry on looking for another property knowing that their money is safe.”

The company also guarantees a minimum £100 referral fee to agents, even if a sale falls through. “If they get a deal at say £150, we are the only company to pay £100 of that up front, after the 14-day cooling-off period, and there’s no clawback on that,” adds Joseph.

Agents are also able to negotiate bespoke referral deals where appropriate. ”They might turn round and say, ‘We only deal with high net worth clients and every property we sell is £5m-plus, we would like £300 on completion’, or whatever, and we can set that as the default.”

Seeing the need for speed

Link to Conveyancing featureSome conveyancing firms are seeing the light, too, in offering a speedy, customer-led service. “We are conveyancers but we go at it from a different angle – push it through, rather than a reactive traditional lawyer approach,” says Dan Watkins, Director of Muve – which is shortlisted for The Negotiator Awards 2019 in Supplier of the Year: Professional Support.

He says many smaller agents don’t have progression teams and just leave the buyer and seller and their lawyers to get on with it.

Referrals are a way of generating work – marketing, so we pay a referral fee by way of a marketing cost. Maybe £200 for a successful introduction.

“Things get stuck because there are so many people involved,” says Watkins. “Our service is the progression. We have an account manager for every client to ensure that if something gets stuck – say we get to a state in the chain where responding to inquiries should take five days and they don’t get back – they are emailing, chasing and getting messages to the other client to chase their lawyers.”

Watkins claims Muve to be the only conveyancer in the country to offer clients a refund if the firm doesn’t hit the 25-day exchange target offered with its premium muveFast product; £500 extra for the service over its standard £699 muveForward deal. “That is a massive financial incentive for us to rapidly push it through. Most lawyers don’t take any price risk, they don’t have any skin in the game – it’s probably one of the reasons they are so slow.”

Muve also offers incentives, “Referrals are just another way of generating work – marketing, so we pay a referral fee by way of a marketing cost. Maybe £200 for a successful introduction.”

The best incentive for agents to use a quality conveyancing provider is the lower fall-through rate. If rather than just getting seven out of ten sales going through to completion they are scoring ten out of ten, a huge uplift in commission.

Proper customer service

Of course, the software that keeps everyone in the chain updated is a vital foundation, underpinning the whole process. While panel managers rightly stress the importance of picking up the ‘phone to chase conveyancers, interruptions slow down the whole process.

Mio’s software can be used to keep abreast of developments by everyone in the process. Buyers use their app to see the state of play at a glance – including what’s happening elsewhere in the chain; estate agents and panel managers have a more advanced version with greater functionality. The firm says its software for agents “is designed to speed up transactions, reduce fall-through rates and help you to win more business”.

“There’s a real blame culture in the market – the agents blame the lawyers for taking so long, the lawyers say the agents pester them and say if you didn’t ring as much we could get on and do the conveyancing,” says product director Jon Horton. “If you create more transparency, break down the ‘silos’ of information and start to join up the dots into a single platform with a shared view, then that benefits the agent; the consumer, being fed information through the Mio app; and the lawyer, because they have fewer phone calls.

“It solves a genuine problem using technology. People have been moaning about it for many, many years – all it takes is for typically agents to rethink the way in which they approach how they manage the chain.”

 

November 27, 2019

One comment

  1. This article should make shocking reading for consumers – let’s hope none of them stumble across this publication inadvertently.
    The numbers thrown around that consumers are paying in bribes ( let’s start being honest here – enforced referral schemes fall foul of the Bribery Act if the referrer knows it is not in the consumer’s interests) then they need to vote with their feet.
    These middlemen enforcers are damaging the industry and their exploits should be subject to much closer examination.
    If it’s such a solution – publish your transaction times and fall through rates.
    We do.

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