Referral Fees – Don’t rely on Conveyancing advice from agents

If you bought a house recently, did the estate agents recommend (or even insist on) a particular firm of Conveyancing Solicitors? If so, were you aware that the Solicitors probably paid a ‘referral fee’ to the agent – in other words, a kickback for getting work from the agent.

The Legal Services Board has recently published a lengthy report on these referral fees. Despite calls from the Law Society that they should be banned, the LSB report has instead called for the bodies which regulate the legal profession, such as the Solicitors Regulation Authority, to introduce new practice rules so that clients are informed of any such fees.

If you don’t already have a Conveyancing Solicitor when you are looking for a property to buy, then you might rely on recommendations from agents.

But you should remember that agents are acting for property sellers, and they only get paid their commission when the sale is completed. Their real interest is to get a sale completed as soon as possible once you have agreed to buy.

The best advice for buyers is to get Conveyancing Quotes from Solicitors before agreeing to buy a property. Agents should not insist on you using the services of any particular Solicitor; you are entitled to instruct anyone you want.

It seems to me that the problem with paying these referral fees to agents is that the agents have a vested interest in the sale completing. Once an agent has agreed a sale, they will want it completed so they will put pressure on Solicitors to complete without regard to the clients interests.

This is especially so for Solicitors who rely for much of their Conveyancing work on introductions from agents. If a Solicitor discovers a problem and feels that he should advise his client to withdraw, will he be prepared to do so if the agents on whom he relies for work tell him not to?

Most of us use the internet to get quotes for services and goods. Firms will pay fees to price comparison websites designed for consumers to compare a variety of services or products.

Buyers won’t know how much has been paid, but it is unlikely anyone will be concerned about such payments because the website won’t have any financial interest in the actual service which is provided. After all the consumer can always get separate quotes direct from individual suppliers if they want to; it’s just easier to go to a single website and get several quotes or prices all in one place.

By getting an Online Quote with the Fridaysmove Conveyancing Cost Calculator before buying a property, you will know exactly how much you will have to find not only for the legal fees but all the other fees which have to be paid out by buyers, such as search fees, stamp duty, and land registry fees.

Instructing a Fridaysmove -approved Conveyancing Solicitor will guarantee you the services of an independent professional Solicitor who will be on your side, and not acting for some firm of estate agents.

I think that the best advice for house-buyers is to think about instructing a Solicitor beforehand. Agents do not advertise that they pay these fees, and although it might be mentioned somewhere in a contract, it is unlikely that many people will read this.

But if a Solicitor has had to pay someone else for the introduction, does that invariably mean that their advice will not be impartial? It is a fairly common commercial practice for referral fees to be paid for introductions, and many firms rely on introductions from
It has become a concern for Conveyancing Solicitors that if they are not prepared to pay these fees, they won’t get so much work.

The crucial difference is that an agent-referred Solicitor may be under pressure to complete the sale, even if it might not be in the best interests of their client - a worrying prospect.


by admin
Monday 14th of September 2015 09:34:29 PM