Brokers are failing to take advantage of clients’ conveyancing needs, argues Harpal Singh, managing director of Conveyancing Alliance Ltd
Every month and quarter we are able to look at the level of both purchase and remortgage instructions and completions and from this take a view on the overall housing and mortgage market as a whole. It has been noticeable for some time that, unsurprisingly, purchase activity has made up the bulk of our business levels while remortgage activity has bumped along the bottom for at least the past year.
Our Q1 2010 figures continue to show the gulf between the two with a year-on-year increase of 23% in purchase instructions and a 60% increase in completions. On the other hand remortgage activity remains stable but low and, while we anticipate a pick-up over the next quarter and second half of 2010, we do not anticipate the type of increase we have seen in the purchase market.
Interestingly, the bulk of this increased purchase activity has not come through mortgage brokers, instead it has come through our growing relationships with estate agents. Which begs the question: why are brokers not taking more advantage of the increase in purchase activity and ensuring they benefit from the additional income stream that this type of conveyancing can bring?
There certainly seems to be a general reluctance on the part of many brokers when it comes to transaction/purchase conveyancing a reluctance that doesn’t seem to emerge when it comes to remortgage conveyancing? Why might this be? Can it really still be that purchase conveyancing is viewed as slightly more complicated and therefore is not as easy to understand as its remortgage counterpart?
It is certainly true to say that remortgage conveyancing, where the broker is simply able to quote a fixed price that rarely changes, might just seem like an easier sell. Whereas, purchase conveyancing pricing often depends on the price of the house and is therefore banded which does require a little more leg-work before the client meeting. However, we are not talking the sales equivalent of climbing the Eiger here.
Quotation systems such as our own effectively do all the donkey work for the broker and give them everything they need to tell the client. It really is only a matter of punching in the numbers and delivering the quotation admittedly it is probably not possible to know this information off the top of your head, unlike with a never-changing remortgage conveyancing fee, but it is surely not a great stretch, especially when there is income to be made.
Brokers may well have had a previous bad experience when it comes to transactional conveyancing or they may still think it is too complicated, but the fact of the matter is that this should really be part of the overall advice experience for a client. At present it would seem that many brokers are being beaten to the conveyancing punch by estate agents and there are good reasons for this.
It’s a fact that, on the whole, estate agents often have the first (and therefore the best) opportunity to claim the conveyancing business with the client. However, who is likely to be more trusted by the client? Without doubt, it’s the broker. They should be viewed as the professional adviser, one who is not just able to sort out the mortgage but a range of services around this, be it conveyancing, insurances, etc.
The client is much more likely to take conveyancing advice from their adviser rather than their estate agent, however, the fact remains that if the adviser does not make the client aware of the service then how can they opt for it? This again is not rocket science it is a simple case of the broker outlining they have access to good quality lawyers and that they’re able to arrange the conveyancing service. While this might need some marketing spend to outline the service, the income from these cases will more than make up for any outlay. It may simply be that the client base needs to be reacquainted with the services on offer and who can say that this isn’t an exercise worth undertaking?
We should also not forget the opportunity for the broker in terms of being in complete control of the process and, given that they only get paid their mortgage procuration fee on completion, being aware of how the conveyancing process is moving along will also give a strong indication of when they are likely to get paid. Pretty useful information one would have to agree especially in terms of business planning and month-to-month cashflow.
All in all, our latest figures continue to reveal the growing importance agents place on their client’s purchase conveyancing business and, correspondingly, the level of income brokers are missing out on because they are unwilling or unable to deliver the necessary service to the client. This type of business may not individually seem worthwhile, however add this up over a year and firms will certainly take notice. Those who are not actively promoting their services in the conveyancing arena should take the time to talk to a distributor like ourselves who will soon be able to put them on the right track and deliver a not insignificant income boost.
