Diary of a High Street Conveyancer; 20th September 2021
I have seen posts on LinkedIn and other forums this week about how solicitors and estate agents should work together . You would think that would be the simplest thing to do; we both want the same outcome which is for the seller to sell and the buyer to buy!
But experience shows that this is one of the most fraught relationships in the conveyancing world and it must be so difficult for the clients to understand why there appears to be such friction between professionals who are meant to be representing them.
Let’s think about it …. And let’s start at the point of exchange – I know an unusual place to start but it probably is the best place in order to illustrate one of the reasons why the relationship can be difficult.
If we are acting in a chain, the exchanges filter back through from the top of the chain, which means that the agents will be able to tell the client that exchange has taken place before the solicitor can – the reason being that as soon as you exchange on the purchase, you will try and exchange on the sale. In that intervening period, the estate agent will tell the client that exchange has taken place and the client may well wonder why the solicitor has not told them.
Pre-empt that conversation and tell the client that it is likely that they will hear from the agent before you on exchange as you will need to exchange on the sale to make sure that the client does not end up with two properties if you are close to the release time.
Then the next thing that happens is that we receive the invoice… estate agents are payable on exchange as that is what it will say in their terms and conditions. They merely choose to wait until completion to be paid, but their invoice is in fact payable on exchange – whether or not the matter completes.
I send the invoice to my client and ask “are you happy for me to pay this invoice on completion?” I think that the varied responses speak volumes… the most often response being “happy is not a word I would use…”
But look at the amount of the invoice compared with what you and I charge. Is it any harder to sell a house worth a few million in its own clearly defined boundaries than a small terraced house with a right of way?
The answer will differ between estate agents and solicitors. Estate agents will charge a percentage so they could do less work on a house worth a million… yes, there may be a chain to keep on top of but it is far easier than a flat with a doubling ground rent. And their fee is determined by the price of the property, not the complexity of the work; whereas solicitors’ fees have been driven down over the years and, for many firms, the fees charged will include a referral fee back to that same agent who has made far more money in a fee than a solicitor could ever hope to make.
There are times when I have seen an agents’ fee and thought that I would only need one of those a month to keep my business afloat. I know that the type of business are different but remember, we are all looking towards the same goal – completion of a house move for a client. Clients will try and negotiate/talk down the solicitors’ fees, but how many times do they try it on with the agent’s fee. They can see it is charged as a percentage and there is therefore an incentive for the agents to achieve a higher price.
If you have put your prices up over the last few months in order to be able to cope with the increased work load I implore you to keep those prices high. Do not feel that you have to drop the prices once we come out of this boom period. Keep prices high; do not feel you are overworked or stressed; invest in staff and new equipment. But most importantly, make the clients see that we are worth every penny they pay us – years and years of experience of dealing with every possible issue there could be in a house move. You and I know it, we must be better at communicating this idea to the clients.
We are worth it
This is written by a real high street conveyancer who wishes to remain anonymous. Read more in Today’s Conveyancer every week.