Home buyers talked into using the conveyancing solicitor by their estate agent recommends have no idea if the estate agent then receives commission for introducing them.
Estate agents often receive a referral fee when they persuade home buyers and sellers to use a particular law firm. The cost of this is then usually passed on to the buyer in the form of higher fees for the conveyancing required to complete their transaction.
However, the system is so opaque that a majority of home buyers who did choose a conveyancing solicitor based on an estate agent recommendation said they were in the dark over any referral fee.
According to research by the Council for Licensed Conveyancers (CLC), the regulatory for specialist property lawyers, more than a quarter of home buyers (26 percent) told a YouGov survey that they had chosen their conveyancing solicitor based on their estate agent's suggestion.
But more than half (59 percent) said they were not aware if the solicitor then paid the estate agent commission for setting up a new client for them. A third (29 percent) said they knew a fee had been paid, but only one in 10 (12 percent) said they knew for certain there was no referral fee.
In fact, referral fees are a hidden but expensive part of much of the estate agent and conveyancing industry with the home buyer likely eventually to be paying for the privilege of being introduced to their own solicitor through higher conveyancing fees.
That's why choosing Homeward Legal to instruct an experienced property lawyer can often make more financial sense.
We are always completely up front and transparent about all our fees from the start. There are no hidden extras ready to spring up as an unpleasant surprise when you come to settle your bill because our fees are fixed.
We guarantee no completion, no fees
Most importantly for your peace of mind, Homeward Legal also offers a no-completion protection. This means that if, for any reason, your transaction falls through, you will not have to any of the solicitor's costs. Nor will you have to find the fees for new property searches when you find another home you want to buy.
We are frank and open about all the costs involved so Homeward Legal clients, unlike many of those polled on behalf of the CLC, can be confident they know who is receiving their money, when and why.
Specialist property lawyers who are regulated by the CLC must tell a client when they pay a referral fee as soon as they receive their initial instructions to complete a property purchase on behalf of the client.
Stay fully in the picture on costs
To ensure compliance on this regulation, the CLC is bringing in new rules from December that will compel the law firms it regulates to tell clients much earlier in the process if commission is being paid to a third party such as an estate agent.
Sheila Kumar, chief executive of the CLC, said: "The guidance will help practices understand what is required, while the benefit to consumers could be considerable.
"Our approach has long been to set transparency requirements so we trust firms will see this as an extension of what they have already been doing."
Savvy home buyers who use Homeward Legal won't have to worry that they're not fully in the picture about their conveyancing costs and services.
Talk to our team now on to get an instant, no-obligation quote. You can also get a bespoke quote for specific conveyancing services online.