Why agents can buy conveyancers and lawyers together
by Eddie Goldsmith
The process of buying and selling houses requires both conveyancers and lawyers. But who best to bring them together? Estate agents, of course.
Conveyancers, like estate agents, are sharing the pain of the credit crunch.
And with the number of housing transactions predicted to fall from more than one million last year to around 770,000 this year, it seems inevitable that everyone involved in process of buying and selling houses will be adversely affected.
The Royal Institution of Chartered Surveyors fears this figure could worsen still. Mortgage approvals – a good indicator of future activity in the housing market – continue to fall and most industry experts believe it may take until next year, if not 2010, before any significant signs of an upturn appear.
But most of us have come to terms with the fact that we are experiencing a major market correction, which will take some time to correct itself. This, however, does not mean we should sit back and accept our fate. Every market, no matter how depressed, presents opportunities.
The challenge is to seek them out and exploit them profitably. The danger, for those who agree with this outlook, is the temptation to look for the big, bold, new opportunities that are yet to be tried and tested. It sounds like an exciting approach but it is rarely one that yields the desired results.
By definition, opportunities that have yet to be exploited are usually harder to unearth. So they present higher risks for the rewards on offer, at least at the outset. The most productive way forward is to exploit possibilities that are, typically, already right under your nose but you’ve not had time to develop.
For estate agents, legal services represent such an opening and for lawyers, estate agents could become key business partners. The credit crunch really could be the catalyst that brings the two professions closer together.
It goes without saying that every housing transaction needs the services of a conveyancer. It is also true that more than 80% of homeowners have no ongoing relationship with a firm of lawyers and no idea how to go about choosing one. Estate agents are ideally placed to recommend a firm of conveyancers to their clients.
Yet a large percentage choose not to or simply refer them to a firm of local lawyers with whom they have a reciprocal arrangement. Unfortunately, many such relationships only generate a trickle of new business, rather than the constant flow originally envisaged.
To make matters worse, once a client has been referred to a legal firm, it can be frustratingly difficult for estate agents to find out precisely what progress has been made with their clients’ cases. This is known as ‘black-box’ conveyancing – keeping clients and estate agents in the dark and only communicating when the time comes to lift the lid and complete the case.
The harsh reality is that, for many general-practice legal firms, conveyancing has to wait in turn behind other more time-sensitive work, such as criminal and commercial cases. So, how long a client’s case will actually take to complete can be anybody’s guess.
But it doesn’t have to be this way. Modern, specialist conveyancing firms not only provide both service and time-to completion guarantees but also give introducers such as estate agents, online access to case files so they can track what’s happening to their client’s case in real time. This type of facility puts estate agents back in the driving seat and enables them to light up that conveyancing black box and see precisely what’s going on.
Specialist conveyancers also pay healthy commissions for introduced business, helping estate agents boost their income per completed housing transaction. So recommending a conveyancer to a client not only enables estate agents to help their clients arrange a professional service – most have no idea how to do so for themselves – but it also ensures that agents are in control during a key phase when the success or failure of a housing transaction is in the hands of a conveyancer. Specialist conveyancing firms can also provide a range of other legal services, including help with foreign property and commercial property transactions, as well as more routine work such as the writing of wills.
If all of this sounds obvious and you’re doing it already, all well and good. The evidence, however, points to the majority of estate agents not capitalising on the opportunity to enhance their client service proposition, boost their income and gain greater control over the client property transactions they are managing. The credit crunch and the resulting slowdown in the housing market need not hit your own cash flow as hard as you may have initially feared.
In fact, identifying and exploiting existing opportunities, enables you both to minimise the potential negative impact on your business and develop a more comprehensive client service proposition for the future.
By working together, the estate agency and legal professions have the ability to make a real difference, though whether they choose to or not is an entirely different matter.