Estate agents not influenced by referral fees, survey reports
Referral payments made by solicitors are ‘the least important consideration’ for estate agents when deciding which law firm to recommend, research has suggested.
In a survey of more than 100 estate agents carried out by conveyancer and home information pack provider The Partnership, only 3% said the payment of a referral fee was the most important factor when it came to advising clients on their choice of conveyancer.
The vast majority – 78% – said a referral fee was the least important consideration.
The quality of a firm’s work and its responsiveness were found to be the key factors that influenced estate agents.
Peter Ambrose, director of The Partnership, said: ‘Estate agents are having a much greater impact on their clients’ choice of conveyancer. Many solicitors seem to think they have to pay referral fees in order to get work, but that is not what agents are interested in.’
Ambrose said that in the current market, estate agents have become much more sensitive to any delays that might jeopardise a sale and it was important that solicitors returned phone calls promptly and did not slow sales down.
‘They want solicitors who are efficient and who provide a high-quality service,’ he said. 'The overall feedback we received from agents was that solicitors need to sharpen up and communicate better.'
Peter Rodd, chairman of the Law Society’s property section, said he was sceptical of the findings, adding that the position varies from location to location. ‘In some areas there are large bulk conveyancing firms who pay referral fees, and other firms may feel at a disadvantage if they don’t do so as well.’
Richard Barnett, chairman of the Law Society’s conveyancing and land law committee, said: ‘It’s obvious that estate agents want a top-class service, but referral fees will be one consideration.’
Comments
Referral Fees
Of course they do not influence agents who refer the clients to their 'in house' legal departments.
Why would they be? The
Why would they be?
The 'small' referral fee what they are paid is minute in comparison to the commission which they make on a sale.
Minimal work for great rewards and unregulated, where as solicitors have greater risks, minimal reward and over-regulated!
Estate agents not influenced...you mean not Number 1 factor!
Of course some are influenced, I know that because we pay some.
It is not enough to some that we SAY we are excellent and the best in the area, we need to throw some cash at them to get through their door. Fine, as it widens our market, gets us in with them, we then show how good we are, and the referral fee drops away.
Work with estate Agents, as they are after the same thing as you.
Problem is, so few, and I mean so few, firms are giving good service at the moment, so not even cash to some Agents will mke up for your reputation - and believe you me, the Estate Agents know how good you are, and if they do not like your standards, you lose!
Solution to referral fees? Give them work, that is what they want, just like you want work from them.
Estate Agents - What Do They Really Want?
You can get all the agents in your area
to tell you what it takes for you to win
their business.
Ask them and then deliver it if you think
it is profitable.
If you don't ask you will never know what
they want.
You could do a survey on surveymonkey
free of charge.
You could invite them to an event
they want to attend and find out.
You could put them on a newsletter
for agents list and send them an email
or tips sheet once a week.
You could even go as far
as paying for their automated
marketing i.e pay the pennies
for the sms texts they could
send to their enquirers...
You generate them mortgage
referral business...you get the
conveyancing/Wills business
and the agent gets even more listings...
In other words...if you want the business
you have to decide it's worth it and
then earn it.
The Law Society - does it do enough for conveyancers?
The Law Society do not do enough for solicitors, they simply do not. CML ride all over them for one example.
They could properly promote solicitors through ad campaigns on tv and billboards. They could do scary (tv licence equiv) adverts - 'do you have someone unqualifed acting'? Enough is paid in our certificate fees - maybe Tesco will do an ad campaign in retaliation, but that is a risk.
They could widen the cirulation of the Law Society Gazette to Estate Agents - with a featurette in there for them.
They could lobby the Government harder for the changes they seek.
Synery
It really doesn't work as Boyd suggests. Solicitors have little opportunity to generate work for agents. A client would be referred to an IFA for mortgage advice - not an estate agent. Monied clients have wills and first time buyers can't afford them or see no need for them. Wills are seen as lose leaders in themselves.
Solicitors would have to reveal any 'special relationship' with an agent and even if all the agents overheads were paid for by the solicitor there would be no obligation on the agent to refer or the client to take the referral.
It would only work with independants, not chains as they automatically refer clients to their inhouse FA and legal department.
Until conveyancing work is properly paid and becomes profitable work all these costs just eat into what little profit if any the solicitor makes. Don't forget that agents charge 150 times (approx) the fee a solicitor charges, ignoring VAT. They are not regulated to the same degree and can act for seller and buyer. Solicitors can't.
Solicitor would be better off setting up their own agencies.
Referral Fees
And Richard Barnett should know as his firm is one of the large bulk conveyancing firms paying referral fees.The staff in a local estate agency that his firm pay fees to tell me that they would prefer to use local solicitors but it is a discipliniary matter if they recommend any firm other than Barnetts."Never mind the quality just feel the size of the bung"
Referral fees or control leads to generate Estate Agent loyalty?
Some ideas:
1. take control of your probate referrals as to who you give them to
2. when you get asked for quotes from the public, check who their Agent is and persuade the enquirer to go to a particular Agent you like to earn you brownie points
3. at the end of a deal, and in your Property Report, make it clear that when your client comes to sell, there are advantages in coming back to you at least so you can recommend which Agent is good to use
4. send a flyer with your quotes (and at the end of a deal) to warn of possible Estate Agent tactics and what to avoid - long contract and notice periods, inflated HIP prices, expensive referred solicitors, massive referral fees they receive, (in the case of buyers) bullying to say your offer will not be accepted unless you use our lawyers, rejecting a HIP if they have not done it, holding on to your passports, giving you too high a valuation to hook you in only to fail to deliver that price, poaching from other Estate Agents for quantity on their books (so you become a 'number'), settling too easy for a low offer, not passing on higher offers because a lower is more guaranteed of a quick profit (I mean sale!).
5. do a external Newsletter to your clients to have them check with you what Agent to use
Tell them 'that the choice of Estate Agent is always very difficult due to potential bad practices but we can advise which will properly look after you, as we work with them all'.
Referral fees are an ok way in to a new market area, but try to replace them by generating leads yourself for Agents (probate sales and hooking clients from your early recommendations) and the relevance of referral fees dwindle.