Veyo - A Change in Strategy

It seems the guys at Veyo are now listening to feedback and taking what appears to be a different course with product development.  The news comes following a recent presentation made by Veyo.

The presentation was given by Paul Humphreys Veyo’s Programme Director. Some new and interesting information came to light during the session.  

It was already known that Veyo has a budget of around 10 million pounds but what was not clear was how much of the fund had been expended so far.  Though no figure was disclosed it was revealed that it is estimated the funding will only last until 2017 at which point Veyo will need to be self funding.  It seems they employ 95 people with 25 based in the UK.  There are a staggering 45 developers employed on the project. 

The aim is still to launch in Spring 2015 but there will no integration with CMS until 2016.  Until then the method of data entry will be  manual. 

Despite the indication given before Christmas, Veyo claims it will not compete with other CMS suppliers. 

Mr Humphreys explains that they no have a modern approach to sharing data which is necessary for CMS and other suppliers to integrate with Veyo, although the the data exchange system has yet to be designed.  Veyo would like to see the spec for this to be agreed between the LSSA (or individual suppliers if necessary) over the next 3 or 4 months. 

Following this there will be a development period and then a testing period after which suppliers could write their own integrations into the Veyo platform. Realistically, Veyo accepted that they would not expect any CMS suppliers to be ready to deliver an integrated product for a least 9 months from today. Veyo claim that whilst its system will work without CMS integration it will work better with it.

Again, despite the massive investment, and 45 developers, there was still no demonstration of the system (although they are apparently in a test phase now).  

An outline of  headline features was however given . Perhaps the two key features were that Veyo would store the data for both sides of a transaction (with appropriate security) and they also wanted to display the “chain view” so a client can see all of the transactions in the chain. Uncanny that this is what I was suggesting should happen when Veyo first announced its arrival.  There was a clear need for a unique identity and it seems that this may now be what is happening with this change in course.  

Interestingly however, Mr Humphrys was not suggesting that lawyers should use their system where they have a solution from another suppliers. He said they may wish to use it where existing suppliers don't have the ability to do it. It is unclear what he meant by this as if it offers a unique chain data view then why would lawyers not wish to use it along side their existing CMS?

Still no news however on pricing! 

Veyo said it is proposing a flexible pricing structure which will consist of a licence fee and a transaction fee but the details of this have not been announced yet. Nor have they formed an opinion on how CMS suppliers and others should integrate with Veyo commercially. 

They are talking to lenders about Veyo but there is no suggestion that lenders would mandate the use of this over any other portal at this point.  Still no views on where the lender aspect to Veyo will fit in given the stronghold Lender Exchange has in this area. 

Veyo was asked about the number of users they anticipate will sign up  and in response all they could say is that they were pleased with the large number of pre-registrations on their websites.   No contract signing will take place until March. I suspect the number of registered lawyers will when fall far short of actual  users with much depending on the eagerly waited announcement on price. 

This sudden though not unexpected change of direction will be welcomed.  The arrogance or self denial which prevailed seems to have left and it is encouraging that Veyo despite claiming they had consulted with the legal technology industry has now made a commitment to do this.  There is no doubt lawyers and those like myself who have an interest in the project have helped to  guide Veyo onto a less rocky road. 

The empathise has moved away from the case management aspects of their system though this may turn out to be a cynical move to get other CMS suppliers on board.  It must be kept in mind that until integration with CMS can commence users of Veyo would need to fall back in the CMS within Veyo. This may lead to some users sticking with Veyo. 

The lack of a clear message on how users might wish to use the system when they already have invested in a CMS still seems lacking. Veyo appear to be saying that some users may wish to use aspects of Veyo that their current CMS do not provide.   Interestingly they are not proposing to charge a lower fee for this reduced usage. 

I suspect they are thinking here of the ‘Chain View’ which is now the USP of the system.  A good idea.  There still however remains an issue as we all know a chain is as strong as its weakest link. If it is not mandatory for all lawyers to be part of Veyo the chain will simply breakdown and become worthless.  Also what is there to prevent other CMS suppliers not building a chain view component of their own.  This would be at no additional cost to the user and would then render Veyo redundant to their existing users.  

The jury is still out I am afraid.  If I was a shareholder in Mastek however, I would still despite this change in approach be asking some probing questions about the level of investment and future expenditure in a product which stills seems to struggling to find a commercially viable identity different to that of existing and well established CMS suppliers.  

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Referral Fees - Good or Bad?

There is nothing more entertaining than watching two conveyancing lawyers engaged in an argument over the use of referral fees within the property market.   There are always plenty of sparks and it is clear that feelings around this subject run high.  

So what are referral fees?

They take several different forms.  The most common is the introduction fee.  This involves  for example a solicitor paying an estate  agent for referring a client looking for conveyancing services to that solicitor.  The fee can be anything up to £300.  Another common one is the  marketing fee.  This where a  a solicitor pays an intermediary for a ‘lead’, that is a name and contact number, to enable that solicitor to contact the potential client direct.  Its not just estate agents who refer work on for payment.  Insurance brokers also do it and can receive substantial payments for referring clients to panels of solicitors run by  third parties who also take a payment. 

Referral fees have already been outlawed in the area of litigation but still remain lawful in the property industry. 

So what are the perceived  benefits?

To begin with those referring will argue that by having control over the choice of solicitor albeit for payment, the referrer can keep control of quality and ensure the client receives the best service.  There is some credibility to this argument as agents and brokers are in making the referral putting their reputation at risk if the conveyancer fails to deliver.   The problem arises however when you bring conflict into the equation and question the motive behind the referral.  Is it as it should be to ensure the best possible outcome for the client or is it more sinister than that?  Is it because the introducer is out to maximize his return on acquiring that client?  In other words the introducer may be focused solely on the money.  In this case there is a real danger the client will be directed in the direction of the highest bidder. 

The other fundamental flaw in all of these arrangements is that the client if left to pay for the referral.  The client may not be aware of this even though there is a professional duty on the part of the lawyer to disclose the existence of the referral fee.  So this is how it flows.  The agent for example may direct a client to a conveyancer and tell the client the conveyancer is good and will only charge say £450.   The agent is more likely than not to keep from the client that out of that £450 the agent will receive a ‘kick back’ of say £150.  So in the end the client is paying £150 more than if she or he had gone the the conveyancer direct.   

The conveyancer may argue that if the client had come direct the fee would have still been  £450 because without the arrangement the conveyancer would have to spend more on advertising to generate new work.   It is unlikely therefore that profitability of a forward thinking conveyancing business would improve if referral fees were banned.  Instead these businesses would have to pay a high price for more general marketing initiatives. The only difference and one that means a lot to many practitioners is the latter situation would leave the lawyer to practice without ties and with integrity and professional independence fully intact. 

The difficulty many practitioners encounter is the inability to compete for clients on a level playing field.  Brokers and agents have access to the client at the very outset of a client’s desire to sell and or buy.   The conveyancer does not get a look in!    The opportunity presented by conveyancers to offer to the public direct Home Information Packs when they were obligatory, helped but as we know the present government in its wisdom did way with these.  It is clear that if lawyers could get to the potential client first the client would have a far greater opportunity to avoid pressure from agents and brokers alike and perhaps be left to make a more informed choice.  

Sadly I can not see any future government having the courage to bring in reform would provide this opportunity and for this reason right or wrong referral fees are likely to be here  for many years to come. 

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

A call for more transparency over mortgage fees

A campaign designed to put pressure on lenders to provide greater transparency when quoting financial fees and charges has had a degree of success with the Chancellor George Osborne announcing in the delivery of his Autumn Statement plans to make mortgage fees clear. 

Spearheaded by the consumer champion Which the move by the Chancellor came after 45,000 people supported the campaign and a further 3,000 contacting their local MP. 

The Council of Mortgage Lenders has been asked by the Government to investigate and come up with some practical solutions  as well as guidelines to make it easier to compare mortgage fees and the cost of mortgages generally. 

Selecting a mortgage can be quite costly and Which report that a couple with a new £100,000 mortgage could find themselves paying £1503 more over two years because of mortgage fees. 

Which also found that only 3 % of consumers could correctly compare five mortgage deals from cheapest to the most expensive from information currently presented by the lenders. 

For more details of the campaign and to provide support visit :http://www.which.co.uk/campaigns/insurance-bank-card-fees/ 

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Fixed rate mortgage compared with Tracker/Variable rate mortgages

The choice between a fixed rate and tracker mortgage is often a difficult one which is made more problematic by the number of different products currently on offer.

According to Which Compare service fixed rate mortgage deals are proving most popular.  In an article published at the end of 2014 Which reported:

‘A huge 76% of people who filtered mortgage results on the website from the start of September 2014 to the end of November 2014 asked to see fixed rate mortgage deals. This compared to 11% for tracker mortgages and just 2% for discount variable rate mortgage deals’.

So what are these options?

Fixed rate mortgages options

As the name suggests, a fixed rate mortgage has an interest rate that is fixed for an initial term - say 2, 5 or even 10 years. This means your monthly mortgage payment will remain the same over the period, giving you certainty and allowing you to budget for a major item of expenditure. At the end of the fixed rate period, the mortgage usually transfers to the lender's variable rate.

Although many economists are not expecting a Bank of England base rate increase until at least late this year, this particular option clearly has some appeal.

According to Which:

‘There were 976 five-year fixed rate mortgage deals on the market in mid-December and 1,505 two year deals. The lowest rate on the market was a two-year fixed rate deal on offer from The Post Office at 1.37% on a 60% loan-to-value (LTV) mortgage. A five-year fixed rate deal is available from HSBC at 2.48%. Over the past three months a number of mortgage lenders have also launched competitively priced 10-year fixed rate deals. For those with a 40% deposit Santander has a 10-year fixed rate deal of 3.44% and Woolwich has a 3.45% offer. People with a 30% deposit would be able to apply for a 10-year fix from Nationwide at a rate of 3.49%’

Tracker/Variable mortgages

Tracker mortgages usually track the Bank of England base rate, and, as a result, your mortgage repayments will change when the base rate moves up or down. Before applying for a tracker mortgage, you should therefore assess whether you would be able to afford for your repayments to increase – if you wouldn't be able to, a tracker mortgage is not the best option for you

According to Which tracker mortgages are on the decline:

‘Over the past nine months the number of tracker mortgages on the market has been steadily falling. There were a total of 482 on the market in April 2014, this had dropped to 330 by August.

In mid-December the figure stood at just 299, with 210 two-year tracker mortgages on offer and no five-year deals. The best rate on offer comes from TSB with a two-year tracker mortgage at 1.09%, tracking 0.59% above base rate’.

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at davidpett@mjpconveyancing.com

Advice to a selling client on a request for a reduced deposit

Accepting a reduced deposit on a sale transaction without explaining the risks and seeking a client’s explicit instructions could expose you to a costly professional negligence action if the transaction fails to complete ( see Morris v Duke Cohan ( 1975) 119 SJ 826) . 

The question all practitioners should be asking is whether the seller will be adequately compensated for any loss on an aborted transaction post exchange of contracts.

So what sort of advice should in these circumstances be given?

The advice we give is in the following terms and is designed as can be seen to ensure that the seller client has been given written advice on the risks in the hope that the client can then make an informed decision on the request.

‘Your buyer(s) is asking to pay a deposit on exchange of contracts which is lower than the sum normally payable, that is 10% of the purchase price. 

The deposit is either paid to us (for us to hold) on exchange of contracts, or is held by the seller solicitors to our order.  That is to say, the seller’s solicitors would be required to pay the deposit to us if and when requested.  They would not be able to refuse or release the deposit to the seller.

We are under a duty to bring this to your attention and to seek your written instructions on the request before proceeding.

The main reason why a deposit is paid is because, if your buyer fails to complete the transaction  ( which is rare but not unknown) , you can forfeit the deposit ( that is keep it) which can then be used to cover your abortive sale costs, the cost of re-sale, and also if necessary the cost of  interest on a bridging loan if you have a related purchase and wish to continue with that transaction. 

For this reason we always advise that the full 10% deposit should be paid so as to ensure that if the transaction does not complete you will not be out of pocket. 

If you were to accept a 5% deposit for example, then if the transaction did not proceed to a completion you would still be able to claim the other 5%,  but as this is not held by us or by the buyers solicitors to our order, you would have the inconvenience and cost of having to take the buyer to court to collect the unpaid part of the deposit.  You may also find that the sum which you do have access too is wholly inadequate to compensate you for your loss.

The purpose of this note is to explain the consequences of accepting a reduced deposit so that you can make an informed decision on the request before providing us with your written instructions.  For this reason if you would like us to explain the above in any further detail please feel free to contact us.

We now await your written instruction’.

David Pett – Director and Solicitor with MJP  Conveyancing 

You must not rely on the information on this website as an alternative to legal advice from your solicitor or other professional legal services provider.   If you have any specific questions about any legal matter you should consult your solicitor or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

There is more to a joined up relationship between estate agents and conveyancers than better communication

It was interesting to see and read the Conveyancing Association’s Conveyancer/Estate Agent Practice Guide launched in the hope it might help to improve communication between conveyancers and estate agents, and in the process, provide clients with greater confidence in the conveyancing process.  I applaud the initiative and wish it well.

As to whether I consider it will succeed, I am I must say highly sceptical.  

The Guide makes some obvious recommendations such as agreed timings for regular phone calls and updates, giving estate agents access to online case tracking and monthly predicted exchanges dates.  Not rocket science, and for a well organised and paid businesses with time and resources to devote I can see practices of this type helping to ensure a transaction can proceed quickly and efficiently.

I question however whether with such a complete difference in culture between how a conveyancer and agent work it is in fact possible for these measures to  succeed.  

My business operates a sophisticated case management system which not only provides clients with 24/7 access to progress, but also, on sale transactions, the sale agent.  I say sophisticated because the agent does not need to sign in on each individual transaction, but has one log in which lists all transactions to which the agent is tagged.  Moreover, the access provides the agent with a full picture of all activity on the file, file notes, correspondence etc.  Despite having desktop access to progress, guess what, yes we still receive daily telephone calls from agents.

The reason for this is that most agents have a deep rooted obsession with using the telephone to seek updates and are not remotely interested in taking a few seconds to log in to find out what is happening.  Why is this?  My theory is that it has a connection with the constant pressure some agents are under to hit targets, and it seems to me that the use of the telephone in the office is how certain agents demonstrate to their superiors that they are working hard to ensure those targets are attained.   

This is also highlights a failing with some agents, that is the apparent reluctance to do anything to seek a better understanding of the conveyancing process. It’s all well and good setting time aside each week to talk and update, but if the agent in question, who can often be quite young and inexperienced, has no idea what you are talking about or the pressures you are under, it’s a complete waste of time and effort.   It’s clear that there can only be effective communication if there is a complete understanding of the process on both sides.

The concerning aspect is that there does not seem to be an appetite to learn and to obtain a better understanding.  It was not too long ago that we sent a circular out to local agents inviting them along to a free seminar designed to provide an overview of the conveyancing process and of the main reasons for delay.  It may not come as a surprise to learn that not one agent had the courtesy of replying let alone attending.

The difference in agendas between an agent and a conveyancer also present a hurdle for better communication.    The agent’s first objective is to find a buyer and once found to make sure the transaction proceeds quickly so there is no delay in collecting the agent’s large and not insignificant fee.  Some agents are more active than others and do assist in helping to obtain documents and to help with the fixing of completion dates.  The agenda even with the help some provide,  still remains the same, the transaction must complete as early as possible so that payment can be collected to enable a target to be reached.   I accept the bi-product of this is that the agent’s input helps the client to ensure the transaction is progressed quickly.  The sceptic I am suspects however this is a secondary rather than primary motive.

Compare this agenda with that of the conveyancer.  The conveyancer’s duty to the client on the sale is to make sure the contract is issued quickly and there is a prompt response to inquiries.  If there is a purchase the conveyancer is under a duty to the client and if there is a mortgage to the lender to ensure the title to the property is good and marketable.  Yes, it is also helpful to be paid for the service supplied, but unlike the agent this is a secondary and not primary objective and one that cannot always be achieved as quickly as some agents demand. 

I also believe there is some resentfulness between a conveyancer and agent due to the massive gulf between the fees each can charge.   If this gap could be bridged then this I am sure communication and cooperation would improve instantly. Most agents’ fees run into thousands whereas the average fee for a conveyancer could be around £500.  I wonder how many agents would refrain from chasing a conveyancer if their budget for the transaction was £500 and not £5000.  I also wonder how many agents actually realise and appreciate how much a call a day can eat into the profit margin of the conveyancer.    

So in conclusion I do support the idea of looking at measures for improving communication, but I do challenge the belief that this can be achieved without first bringing about a major shift of understanding on the part of the agent.    The agent needs to understand and acknowledge that agendas are different and that the time the agent expects the conveyancer to devote to the agent for updates is often difficult to justify in relation to the fee the conveyancer is able to charge.  Dare I suggest that if the agent was prepared to pay the conveyancer an extra fee for the updates and for collecting the agent’s fee whether this would be a step in the right direction?

David Pett  - Solicitor and Director with MJPConveyancing