What would you do to improve
the home-moving process?
1
Contents!
1
Contents.................................................................................................................................. 1
2
Survey ..................................................................................................................................... 2
2.1
Background................................................................................................................................. 2
2.2
What we know ............................................................................................................................. 2
3
Questions ................................................................................................................................ 4
3.1
3.1.1
3.2
3.2.1
3.3
3.3.1
Q1: Which of these best describes your relationship with your conveyancer .................................. 4
Learning Outcomes ..................................................................................................................................... 4
Q2: If Applicable, please rank how you select your “preferred conveyancing partner” ................... 4
Learning Outcomes ..................................................................................................................................... 5
Q3: What percentage of your sellers do you direct to your “preferred conveyancing partner?” ...... 5
Learning Outcomes ..................................................................................................................................... 5
3.4
Q4: From a customer service point of view, how often would you like to receive updates from your
conveyancing partner(s)? ....................................................................................................................... 6
3.4.1
3.5
3.5.1
3.5.2
3.5.3
3.6
4
Learning Outcomes ..................................................................................................................................... 6
Q5: What would you do to speed up the home moving process? ................................................... 6
Communication .......................................................................................................................................... 6
Transparency and Information Sharing ...................................................................................................... 7
Preparation ................................................................................................................................................. 7
Practical solutions to take forward .............................................................................................. 7
Conclusion .............................................................................................................................. 8
4.1
Quick Sale Ready ......................................................................................................................... 8
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2
Survey
2.1
Background
Landmark Estate Agency Services recently undertook a survey of Estate Agents to ask the industry what it
thought should be done to speed up the conveyancing. The survey was taken in anticipation of the
Department of Business, Innovation & Skills “call for evidence” on the home buying process.
The survey was focused on residential property and the responses received were from Estate Agents who
identified predominantly as 1-3 branch businesses.
The purpose of this report is to provide an insight into the mindset of the Estate Agency sector when it comes
to the speed of property transactions, and what learning outcomes we can take away from the responses,
both for Estate Agents and their property partners.
2.2
What we know
Estate Agency controls much of the activity undertaken in the property sector as the first port of call for home
movers.
There are c. 5000 Estate Agent businesses in England & Wales, with c. 14,000 branches. The residential market
is dominated by large corporate agents with the top 500 agents by listings occupying c.50% of the branch
network. The growth of online or hybrid estate agency has presented challenges to the sector as to how it
moves forward but is not in the scope of this survey as on and offline agents will still be working with home
moving partners to facilitate their client’s move.
A 2016 survey undertaken by consumer watchdog Which?1 looked at the reasons for property transactions
falling through. Of the 2,000 homebuyers surveyed, 28% had an offer accepted on a property only for the
purchase to fall through. On average, purchasers were £2,899 out of pocket as a result of the failure of the
transaction to progress. A breakdown of the reasons for purchases falling through is outlined on the next
page.
1
http://www.which.co.uk/news/2016/06/three-in-10-property-purchases-fall-through-442589/
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Reason
% of those who experienced a
failed transaction
I (buyer) pulled out - my own property sale had fallen through
27%
I (buyer) pulled out - I found somewhere else to buy
21%
The seller pulled out - someone else made a higher offer (I was gazumped)
21%
I (buyer) pulled out - I decided I didn't like the property enough to buy it
15%
after all
The seller pulled out - the process took too long
13%
We (buyer and seller) had a disagreement and couldn't find a resolution,
4%
so the transaction collapsed
Other
8%
While some of these issues are often out of the control of the agent, there are ways to take greater control of
the transaction and mitigate some of these risks. The focus of this survey was to look at the relationship
between estate agents and solicitors.
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3
Questions
3.1
Q1: Which of these best describes your relationship with your conveyancer
3.1.1
Learning Outcomes
Less than 5% of respondents indicated they had no relationship with a conveyancer suggesting that
they are missing out on an opportunity to add greater value to their clients, and potentially provide
some additional income via referral fees.
Of the remaining 95%, more than 70% indicated they had a relationship with 2 or more conveyancers
suggesting that agents are “hedging their bets” when it comes to their referral relationships and are
happy to point their clients in the direction of a few firms.
3.2
Q2: If Applicable, please rank how you select your “preferred conveyancing partner”
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3.2.1
Learning Outcomes
Respondents were invited to rank each of the indicators from 1 to 5, 5 being the most important ad 1
being the least. Quality of Work featured as the highest average rank with a score of 4.5, with Reputation
following with a score of 3.9.
The indicator with the lowest score was Referral Fee which received an average ranking of just 2.3
suggesting that despite the financial opportunities presented by referrals, the reflection on those who
recommend is a significant driver for small agents.
3.3
Q3: What percentage of your sellers do you direct to your “preferred conveyancing partner?”
3.3.1
Learning Outcomes
The responses to this question demonstrates the real influence Estate Agents have on home movers
and the value of referral relationships. Most competitive business sectors would traditionally operate
around a 20-30% conversion ratio, with commodity business a little lower and niche businesses a little
higher.
The graphic above shows just under 80% of agents indicating they convert more than 31% of their
clients to their “preferred conveyancing partner.” This is an incentive for “preferred conveyancing
partners” to maintain their service levels and a massive carrot for conveyancing suppliers wanting to
work more closely with estate agents.
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3.4
Q4: From a customer service point of view, how often would you like to receive updates from
your conveyancing partner(s)?
3.4.1
Learning Outcomes
The overwhelming response to this question is at least once a week. We will see in the next
section that Estate Agents view communication as a critical time saver in the conveyancing
process.
A smaller percentage of agents would like to be kept informed when there is something to
report. The industry has responded to this demand by providing case tracking software to
estate agents and solicitors which triggers emails to all parties involved in the transaction at
key stages such as completion of the TA forms, draft contracts, additional enquiries etc.
3.5
Q5: What would you do to speed up the home moving process?
For this question respondents were offered a free text box to add any additional comments.
Those who responded took the opportunity put forward their own thoughts on improving the
home buying process. Perhaps inevitably there was an element of finger pointing but when
analysed, these comments fell into three broad categories.
3.5.1
Communication
A number of the respondents referred to outdated communications methods such as fax as
poor practice. A general consensus amongst other respondents was that more regular
discussions between agents, solicitors and clients would ensure transactions move along more
quickly. One particular theme that is evident from the responses is that solicitors do not
communicate the value of what they do to estate agents; there is too little understanding of
what solicitors do, what the challenges are and why there are delays. Improved communication
will help agents better understand and enable them to set reasonable expectations of vendors
and purchasers.
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3.5.2
Transparency and Information Sharing
An interesting theme in the context of the Consumer Protection Regulations which require
vendors and agents to provide more information up front in the sale process, thereby reducing
the risk of something being uncovered that could affect the transaction further down the line.
Respondents highlighted the duplication of effort undertaken during the home moving process,
including client verification and property ownership, and establishing details about the
property for the purposes of marketing and CPRs. One respondent suggested universal
documentation that can be shared by lenders, mortgage brokers, IFAs, estate agents, solicitors
etc.
Another respondent suggested that a centralised register of leasehold management details are
held by Land Registry or an alternative government agency providing instant access to such
information and speeding up the process whilst serving to better regulate management
companies.
3.5.3
Preparation
Of the responses, 37% either mention HIPs directly, or infer a HIP-like solution. Whilst the
content and implementation of Home Information Packs (HIPs) drew strong criticism from the
property sector as a whole, the concept of bringing together relevant documentation at the
outset had a lot of support. Collating this information at the outset, rather than at the point a
buyer is found, has the potential to save a lot of time.
Preparation of documentation featured heavily in the responses. A number of respondents
discussed the need for the key elements of the legal pack to be prepared prior to offer which
would save time when a solicitor is instructed. Although it didn’t come up directly in the
responses, preparation of such information not only has the potential to speed up the
transaction but also ensure agents comply with their responsibilities to establish material
information under the Consumer Protection for Unfair Trading Regulations 2008. This in turn
means buyers are better informed and there is less chance of the property falling through.
Practical solutions to take forward
3.6
Amongst the responses Estate Agents brought forward some very practical ideas as the how to improve the
home moving process. Some of these are ideas that can be implemented include:
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Searches ordered earlier in the process, either by solicitors at the point a case is opened or by
vendors
Leasehold information is established by the estate agent at the point of listing
Central register of Leasehold Management information held by government
No offers until mortgage is in place
Centralised ID verification service for UK and/or property permits for foreign buyers licensed by
government
Universal forms for all parties
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Conclusion
The survey identified 56% of agents consider delays in the conveyancing process as one of the barriers to the
speed of the home move. Agents are critical of the use of traditional methods of communication (mail/ DX/
fax) with 38% highlighting the potential a secure and centralised document sharing between solicitors and
estate agents has on improving transparency and reducing delays.
There is an appreciation in the sector that chains are a consistent cause of delay; and an acknowledgement
that better preparation, improved transparency and document sharing could help to reduce the practical
delays of disseminating information.
Respondents took the opportunity to point fingers at other parts of the process, including lenders, the legal
process, valuations and surveying etc. with some of the criticism fair, some unfair and in some cases failing
to really understand the challenges presented by moving home. And herein lies an opportunity for these
partners in the process to provide better education of their role and work more closely with agents.
Communication, Transparency and Information Sharing, and Preparation relate to all parties in the process.
Quick Sale Ready
4.1
A simple compliance service that will help Estate Agents win more listings.
The service uses information you are gathering as part of your obligations under CPRs and AML regulations to
better prepare vendors before they accept an offer. The key aim is to ensure you are asking the right questions
about the property and documenting responses to ensure both you and your vendors comply with CPRs.
Quick Sale Ready incorporates the official Law Society documents which can be shared with a solicitor to
create the seller’s pack so there is no duplication of effort. When an offer is accepted, all the key
documentation is ready saving time further down the line.
Critically Quick Sale Ready tackles a number of the obstacles identified in this survey;
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improving the quality and transparency of information provided at the point of listing means better
quality viewings, more committed purchasers and fewer aborted transactions
establishing leasehold information at the outset saves time further down the line
less duplication of effort as documentation can be shared across all parties
electronic checks provide a standardised client verification process across the business
listing your properties as Quick Sale Ready provides a differentiator for your business and vendors
For more information please contact Landmark on
[email protected]/ 01524 220013
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Landmark Estate Agency Services: Imperium, Imperial Way, Reading, Berkshire, RG2 0TD
T: 01524 220013
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