You may not be aware of this but when you ask your estate agent (or broker) for a referral to a “good” solicitor, most agents these days take what is called a referral fee from the provider for the lead. In my opinion, this is extremely bad practice and whilst not technically illegal as long as it is done correctly, it does rather influence the advice you get in my opinion.

Essentially, these referrals are up for the highest bidder, so the provider that pays the agent more will most likely get the “recommendation”. This referral fee can be as high as £200 - £250 per case and presents two problems for you, the consumer:

1.       Can you rely on the recommendation you are being given if the person recommending the provider is most likely to recommend the highest bidder? Is the company that is prepared to pay the most for your lead likely to be the company you need or want?

2.       Whilst you might say it matters not if someone makes a buck out of a referral, I’m afraid the net effect is that your fee is most likely going to be higher to absorb the referral fee.

At it’s very worst, I have heard of agents insisting that clients at least get a quote from “x” or insist that they sit down with “their” mortgage advisor. Be under no illusion, this is not to benefit you but it is in fact to increase their extra revenue from your transaction behind the scenes. It is true that fee’s such as this need to be disclosed and itemised on your eventual invoice, but I can’t think I would be very happy to see a fee on my invoice going directly into an agents pocket that set up the deal and was already getting paid in the process?

This is of course not to say that you shouldn’t ask your agent or broker for advice as many agents, including ourselves, NEVER accept referral fees and will never do so in order to sustain the credibility of our advice. We only recommend solicitors based on recent experience and actual results to ensure that you are getting the people you need.

Ask your agent or broker at the outset if they are getting paid for referrals, they are obliged to tell you if they are. If your agent doesn’t accept referral fees, then ask them for 2 or 3 options and then seek a quote from each provider to see who you get on with, who responds promptly and professionally and how much they charge. From this, YOU can make an informed decision.

It is my hope that this bad practice that tarnishes our industry will soon be outlawed but until then be warned, be aware and always check your bill!!

Bradley Start
Partner, START & CO