(pun intended)

When you pop into your local estate agents and begin to search for your dream home, whether that’s bigger, smaller or in a new area, isn’t it so nice to feel that the agent has your back and is really local? Once you’ve found the ideal property and your offer is accepted then you feel like you’re half way there. A great result for the team.

OK, so there are a few things to remember about estate agents. Firstly they don’t act for you, they are not YOUR agent, they really act for the Seller, after all it’s the Seller who pays them out of the proceeds of the sale. Both Solicitors and Surveyors are bound by very strict codes of ethics when it comes to conflicts of interest, but the line is much more easily dusted over when it comes to Estate Agents. It’s important to bear this in mind when we move on to the subject of estate agents who ‘recommend’ Solicitors and how much that costs. It’s also important to consider that most Estate Agents are now national chains, so your ‘local’ branch can be anything but when it comes down to it.

We were sent a comparable quote by one of our clients, which was given to her by her local (national) estate agency, for conveyancing for her purchase. On the face of it the price was not dissimilar to ours, with their fee being £699+VAT and ours being £600+VAT, but that is where the similarities ended. We were shocked to see a list of additional fees that were either significantly more than we charge or that we already include in the price. The SDLT return, for example, is an obligatory document that needs to be returned to HMRC within 14days of the transaction. Whilst it is possible for clients to do this themselves it is more usually done by the solicitor and more usually included in the price tag and not another £75+VAT on.  top. Similarly we don’t charge extra for using our computer system or storing your file at the end of the transaction, which were charged at £25+VAT and £30+VAT respectively. We think our customers would expect these to be included in the price!

	Them	Us
Fixed Fee	£699	£600
Telegraphic Transfer Fee	£35	£16
ID Verification	£10	–
SDLT Return	£75	–
Lender Fees	£50	–
Case Software Fee	£25	–
Land Registry Fee	£95	£95
Searches	£300	£178.20
Archive Fee	£30	–
VAT	£178	£123.20
Total	£1,497.80	£1012.40

A price difference of £99 at the beginning has widened into over £400 upon closer inspection. Further reading of the detailed quote reveals that of the total £894 that is actually spent on legal fees, £430 of this does not go to solicitors at all. A £250 fee goes to the ‘panel manager’ and there is a £180  referral fee. The referral fee is a kick back to the estate agent. We then discovered that the ‘panel manager’, who allocates which legal firm gets your work, is actually owned by the same umbrella PLC company that owns the estate agency chain. So you are effectively paying £430+VAT to the estate agents just for recommending a firm of solicitors. Given that a company you’ve never engaged with chooses your solicitor from those who have competed to be on its panel, there is no guarantee that your solicitor will even be in your area, and you can certainly now see that they are not recommended on the basis of merit.

Of the £600 we would charge for a comparable transaction, that whole £600 is spent with a local firm of Solicitors so you are both supporting a small business and your local economy. For the £894 that you would spend with the estate agent’s recommendation, only £464 of that will be spent on your case and likely not with a local company. For 75% of the cost, and an arm’s length transaction, we struggle to see how any solicitor could deliver a comparable level of service. You are paying more and ending up with less.

We feel that Estate Agent’s ‘recommendations’ are nothing of the sort. They are not recommending to their client, as this is the Seller not you. The only way estate agents make money out of Buyers is via these back door charges on their conveyancing panels. Yes, we agree, it is scandalous.

If you would like an impartial, free conveyancing quote, without the ‘middle man’ please call us on 01653 916 606.

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