You might not know it, but you
could be paying more for legal services when moving home because of the recommendation
received form your estate agent. The reason
for this is that many estate agents have ‘arrangements’ with solicitors under
which they receive what is known as a ‘referral fee’ or as it is often described, a ‘kick back’.
Many of the solicitors who
operate in this way do not absorb the referral fee in their fee but add the fee
on to the fee they quote you. This means
that you could very well be paying as much as £200 more for the service than
you would have otherwise paid had you shopped around and gone to a conveyancing
solicitor direct.
Is this legal? Well at present yes providing the estate
agent and solicitor tell you about the arrangement before you make the decision
to instruct the solicitor. The question
is how many of those involved actually disclose the referral fee. Sadly I do not believe it is many.
It also raises the question
whether instructing a solicitor recommended by a ‘tied’ estate agent will ensure
you receive the best service available. My
experience is that where such arrangements exist the solicitors instructed are normally
part of some ‘factory’ operation and in the main the service levels of those firms
is very poor. This could mean you will find
yourself having to constantly chase and inevitably the move will take longer.
Instructing an agent with a ‘pet’
solicitor may also impair the solicitor’s ability to offer independent advice.
The agent will 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 the
connected solicitor to complete without regard to your best interests. If your solicitor
discovers a problem and considers he should advise you to withdraw, will he be
prepared to do so if the agents on whom he relies for work tell him not to?
My advice is not to rely on your agent’s recommendation. Shop around, visit websites, read the reviews
on the service offered and do not be tempted by deals offered by some agents to
‘wrap’ your legal fees in with the agent’s fee.
Perhaps even choose your solicitor before you put your house on the
market because many solicitors like us know which are the 'good' and 'not so good' agents. And before you ask, no we do not get a ‘kick
back’ for recommending an agent!
