A potential customer of Purplebricks was told that the firm would be paid a referral fee of £382.85 plus VAT for conveyancing.
The enquirer used the live chat service, explaining that he was deaf and needed to read all the small print.
He asked how much a legal package would cost for the sale of a freehold property worth about £100,000.
Using an email link sent by the live chat service, he obtained a quote from Advanced Conveyancing for £599.
Official copies would add another £28, and VAT £125.40, bringing the total up to £752.40.
Notes at the end of the quote said that if the sale fell through, there would be no fee.
The notes added: “The Introducer Purplebricks, who has provided this quotation, has suggested that you use a particular lawyer for your conveyancing.
“The Introducer is required to advise you that it has a financial arrangement with the Lawyer and that the Lawyer will pay a referral fee of £382.85 + VAT to the Introducer.
“The Lawyer is totally independent from the Introducer and the Lawyer will act only on your instructions and always in your best interests.
“The Lawyer will provide you with impartial, independent advice when providing this service and you are able to raise any questions with them about any aspect of your case.”
This is an edited excerpt from the full live chat script, which was sent to EYE:
[Customer] What are the typical fees for your legal package for the sale of a property £100,000-ish freehold
[Adviser] Our fee is £899 inc VAT (£1399 in London and surrounding areas). The only addition to this is £84 inc VAT for an EPC Certificate if you need one, as these are valid on your property for 10 years; and £300 inc VAT for our Accompanied Viewings option and £399 inc VAT in London and Surrounding areas.
[Adviser] I won’t be able to confirm the legal costs for a solicitor as they are dependent on several different factors however, if you click on the following link, this will take you to the website for the panel that we recommend where you can enter a few details to get a quick quote for both selling and buying a property – https://ezie.ieway.co.uk/
[Adviser] What I can do for you is arrange a free no obligation consultation, this is where we can send our trained and experienced Local property expert to come out and value your property for you, they will go through all the services, fees and value your home. Leaving you with the report to consider. How does that sound?
[Customer] Legals seem expensive @ £599 especially when solicitor only gets paid £215ish
A spokesperson for Purplebricks yesterday evening told EYE: “We receive a referral fee for conveyancing, which is standard practice in the industry.
“The legal costs we offer customers are a competitive flat fee – giving our customers peace of mind that their legal costs won’t change.”
Comments (49)
The solicitors choose to be part of the panel and accept those fees so they can generate a massive amount of leads into their business. It is just business.
Flat fixed fee charges to the customer, win win
Masses of leads the solicitors would never otherwise see, win win
They are disclosed fees, nothing hidden. Cannot see what the problem is here, apart from another opportunty to ‘TROLL’ Purplebricks and their 5% market share. It’s getting quite boring now.
#InOtherNews
“…Purplebricks and their 5% market share.”
SORRY? Care to bounce that figure off us again?
And while you are at it, do your best to justify what will, without doubt, be heralded as the single most complete bull5h!t line posted on EYE of the year – if not ever…
65% referral fee for doing nothing is the question. PB marketing is all about “commissary” ….. ??????
I think a far bigger issue is with New Builds where the developer “heavily recommends” the buyer use their preferred mortgage advisor and conveyancer. See leasehold issues that buyers claim they were unaware off.
No mention of ‘administration’ fee of £360 payable immediately if a PB customer deferred their upfront fee and then decided not to use their recommended conveyancers for any reason?
Possibly as a consequence of poor reviews?
See this review at https://www.solicitor.info/premier-property-laywers-1/leicester
27/02/17 – Reviewed by Anonymous
I was advised to use eZie through the estate agent purple bricks. After trying to make initial contact with my solicitor for 2 weeks, I was told I had now been allocated a second solicitor and new contacts given.
I was then told the seller was also using eZie, and reassured there would be no conflict of interest due to eZie using two separate offices from two different cities as representatives. This I was totally fine with and was told if anything that it would speed up the process, and in the highly unlikely chance of there being a conflict of interest eZie would reimburse both parties any initial payments made.
The process as a whole took maybe 12 weeks no chains. But the gruelling months I had to participate in numerous lies, un professionalisms, lack of feedback, having to re send documents, unanswered calls and queries, their quote, even though fixed changed twice! They even stole £500 cashback incentive from my lender to which I was to receive and spend at my own discretion. On confronting eZie about this they proceeded to make up reasons as to why I was billed adding up to exactly £500, this included an admin fee due to conflict of interest resulting in the seller having to find and use a different solicitor.
Even though this was my first time dealing with solicitors and buying a property I could not describe this experience as anything less than disgusting. The worry, stress and pressure of losing my dream home was too much not to comply.
I would not recommend eZie under any circumstance!
Forgive me….. I’ve never done the “referral fees” thing, not the way I do business. Each to their own.
However if “a referral payment” of some sort is going to be paid between receiver/provider I would want to know …… is it there, in their terms of business in clear terms/is it discussed/highlighted verbally the moment a discussion takes place with the client about legal services and is it clear that the PB Rep sitting with the client is NOT paid any incentive whatsoever to secure the legal services business.
……and can someone explain in crystal clear terms the “formula” whereby the “PB Client” makes an overall payment of “X”, the recommended Solictor then receives “Y” and PB received “Z” …..yet the “Z/PB” payment far outweighs what the Solicitor is being paid to actually do the work? How on earth could one justify such a large payment/percentage being kicked back to Purplebricks?
Also, if the Solicitor can perform the legal services at that much reduced price, are they making that cost available to all their non-PB clients or are they effectively “overcharging” their non-PB clients?
I get volume/I get discounts – I don’t get the substantial financial kickback which is from every angle – disproportionate in relation to the actual effort of providing an “introduction”.
It seems yet another example of Purplebricks playing hide n’ seek with their real costs to the consumer.
I’m assuming that Purplebricks is writing to all their customers who have paid for their recommended Legal Services to confirm that a substantial amount of the money that the PB client paid for what they thought were Legal Services was actually being received by Purplebricks – and of course if said PB client was unaware then PB will refund/compensate them accordingly.
Scandalbricks?
Mike, I was not aware that in some cases the agent takes more than 50% and whilst I agree that the customer does not have to take the services, the agent is in a position of power and their views would be heavily considered and relied upon.
Chris, what comes first, bad public reviews or bad service caused by low fees?
In this example, the customer only found out because he was deaf and asked for the small print to be read to him. Most people do not read the small print (way too much of it). In which case there is no real transparency.
If I was recommended to a private medical facility for an op, and the fee quoted was £599.00 but £382.85 was going to the introducer, I would stay on the NHS waiting list!
As well as the need for more transparency, there should be a cap on the percentage of the amount of the fee that can be taken as a referral fee, maybe 20/25%.
“The Lawyer is totally independent from the Introducer and the Lawyer will act only on your instructions and always in your best interests.
“The Lawyer will provide you with impartial, independent advice when providing this service and you are able to raise any questions with them about any aspect of your case.”
I am sure in practice this is the case. But subconsciously when one introducer is sending a large volume of work to you, there is going to be pressure on the Solicitors to not “rock the boat” knowing their business model depends on that workflow continuing. Furthermore the Agents know the same situation exists and can exert pressure to get files through with the threat of work being withdrawn if targets are not hit.
I know for a fact this happens having worked for a Solicitors many years ago doing panel work. The very aggressive Agents sending them work would often ring up making it quite clear they felt they were the clients and what they said went, even if their requirements were completely at odds with the clients. In the end I stopped doing that work because it simply went against my principles. However there were cases where I came across the Agent, and on a couple of occasions where I found defective titles and had cause to advise my clients to withdraw. Calls were made to the senior partner. He would then take the files over and mysteriously they would very quickly exchange! Not surprisingly that firm are no longer in business.
The Agents still farm out their business via yet another third party and the clients end up paying colossal introducer fees. Conveyancing really has turned into a gravy train.
Proof if ever it were needed of the “pile it high, do it cheap” conveyancers. At that price they cannot afford experienced quality staff to do the job, cannot devote time to files, and of course cannot expedite transactions because of the volume. Which is why the property transaction times and standards are slipping ever lower.
For the firm quoted here you can be sure all the other factory outfits have a similar Modus operandi. Which again explains everything. The sooner there is an industrial revolution and these factories become obsolete the better for all of us. Most importantly for the customers, who are always forgotten in all this, they are the people who deserve better when they are trying to buy their dream property.
The “industrial revolution” is coming…….Block chain technology will change this game within the next five years…….Please!!
The conveyancer receives only £212 from the £599 being charged to the buyer?!!!!!
That cannot be right – as that would automatically be investigated by CLC as bringing the legal profession into disrepute.
Our lowest fee is £895 – never £212 !?
If I charged that tiny amount I would feel I had no choice but to take on 5 times as many clients as a normal conveyancer just to pay the office rent and overheads, and certainly to the detriment of the client I would feel I :
1. could never return my clients calls (couldn’t afford to spend the time speaking to them)
2. would have to drip feed my reporting to my client (bung it all out to them as I receive it however confused the client may end up)
3. would only employ people without any legal training, and very young and cheap, and give them 5 minutes (not a three year law degree) training and pray they don’t make mistakes
4. would never offer client meetings
5. would be very brief in my looking at the legal work (as I could not afford to be thorough and spend the time, and having cheap staff, they would not spot everything)
6. would ignore complaints (I would have to, too many would come in….and what would I care, I am buying my next customer anyway)
7.would pray that the estate agent does not turn off the taps of legal work they refer
8. if the estate agent taking that much from me wants me to let a legal defect go through so they get paid their commission….I would feel pressured to do so
WARNING:
Low conveyancing charges – for up to 12 weeks of complex legal work to ensure the buyer has no legal defects with the proeprty (i.e missing right of way over the main access road, planning consent for the recent building works, missing deeds to part of the land, a restriction on the use of the garden as only agricultural land etc etc etc)….and being expert enough to pay enough attention to make sure the other lawyer is not a fraudster and who would abscond with all my clients’ money…..
Good luck!
The big question is why “53” at the end of your name?
I’ve had “Name already chosen” a million times, but wow 52 other “TwitterSalisPropNews” usernames! that’s just unlucky.
😉 PS it was funny in my mind.
As long as the fee is transparent and all parties are aware and capped at say £100, then I don’t see an issue with this.
That’s more than most on-liners charge!!!
Scrap these fees
In my opinion the most important thing to note here is that should a referral fee ban be implemented big companies like PB and Countrywide will find ways round it, just like no doubt some large companies will already be thinking of ways round the tenant fee ban. As mentioned by agent 37, local independents who refer the solicitor round the corner for £100, it is those companies that will get punished the most by a referral fee ban, those who are referring to good local companies providing a good service.
Almost £800 plus for referring a client who is buying and selling is scandalous.
But it is transparent hence this thread and that’s what will likely be legislated for.
I happen to agree that nearly £400 per trasnaction is fierce and difficult to justify but providing veeryone knows. Ultimately the total fee is what counts for the customer and if the law firm can deliver service at low income levels thats down to them. If they can, why are others so expensive?
Usually referral arrangements are based on no move no fee and fixed fees which is clearly advantageous to the customer.
But thats the problems isnt it, they aren’t delivering service. If they are charging such low fees, they will be paying their staff a wage reflecting this. They will also need serious amounts of volume to make the numbers work, yet again affecting the level of service they can provide their customers with.
Is transparency the issue or is the amount of kickback the issue. I am pretty sure once the government get their teeth into this, no matter no much transparency the industry displays it wont make any difference.
It’s economy of scale compared to a local. I think it’s fair to say we have all had good and bad experiences with all our local solicitors, and when in chains with panel firms. The fact that Purplebricks ask clients for reviews and have recommended a conveyancer is the reason theirs is in the spotlight so much, but generally they’re all pretty much average unless you’ve used one before and had good experiences. Every solicitor I could name who I think has a good reputation where I live, I’ve had a client tell me they were awful for them. It’s just the way it is!!
This conversation has already been had on a previous article, but I’m sure everyone wants the platform to bash them a bit more. That referral fee isn’t particularly different to any corporate agent’s kickback. If you look at all the big corporates with the panel firms, it’s a similar amount, compared to the £100 odd quid an independent gets from the solicitors office round the corner. It’s not necessarily right, but it’s process and buying power. If an independent could get £200 if they promised a certain volume and exclusive referrals, they’d try for it. It’s just business. What are people’s local firms quoting compared to £750 odd?
Agree. The law firm doesn’t have to join the panel and the customer doesn’t have to use the service although I undertsand that PB charge you more if you go elsewhere for legals and, of course, make money if you use theirs!
Many of my clients (independents) get around £200 plus VAT for referrals and use locally created “panels”
It is a negotiation (clearly buying power has some influence)
I suggest that a far more beneficial relationship between agent, conveyancer and clients would arise if the referral of cases was dependent upon performance rather than money.
The agent refers cases ONLY if the conveyancer undertakes to (on average) get them through in an agreed timescale – say 10 weeks. If they fail to perform then the agent should find a firm that will.
Everyone involved would benefit.
Something not quite right here. The agent earns more from the legal fee the the lawyer?
To be fair, based on the public reviews, the lawyers used don’t deserve to be paid much/ at all.
Was this dreamt up by Mr Russell, P.B’s Chief Marketing Officer?
If so hardly a surprise then, he joined P.B. from “confused.com” where guess what…
….he was Marketing Director.
Rob. You are well aware that this is the case with several of the larger players. One can argue the merits or otherwise but the law firm doesn’t have to join the “panel” and the customer doesn’t have to take the “services”
CLC should be investigating, as at that charge, I question if the profession is not being brought into disrepute.
All transparent and above board. I’m sure #PURP customers will be reassured that Purplebricks are helping them save money by using these solicitors.
Here he is!
Snore.
Still illiciting responses from sad little nobody’s. RESULT!
Ironic response with the name calling.
I just find it fitting that your first comment on a post since your estate agency closed down is on a Purple Bricks post….
You weren’t here yesterday were you dopey?
Chris,
>customers will be reassured that Purplebricks are helping them save money by using these solicitors.
In 2009 your companies shareholder funds were minus £107,812 and this declined in all but 2 years to the value in the 2018 accounts of minus £321,594. Creditors in the 2018 accounts amount to £340,892.
Can you confirm you paid off all creditors before ceasing trading?
Can you explain why the accounts state “The director, Mr CJ Wood, undertakes not to draw upon the director’s loan account classified as long term for the foreseeable future.”?
The Directors’ current account is listed in the creditors as £88,856. Can you say whether you think your loan to the company can be thought of as a good investment?
There are probably no more than about six people on this site that have any interest in what you spout. You are a troll and the sooner you get bored and move on, the happier many of us will be.
Don’t feed the troll.
Can you please explain how it’s trolling? They are genuine questions followed with facts?
I’m curious.
A troll is a person who starts quarrels or upsets people on the Internet to distract and sow discord by posting inflammatory and digressive,extraneous, or off-topic messages in an online community (such as a newsgroup, forum, chat room, or blog) with the intent of provoking readers into displaying emotional responsesand normalizing tangential discussion, whether for the troll’s amusement or a specific gain.
(Wikipedia)
>with the intent of provoking readers into displaying emotional responsesand normalizing tangential discussion
Well that’s not why I’m posting. I want a reasoned response. 99% of my posts are not aimed at winding people up (but if people have a go at me I occasionally let myself down). If somebody’s posts wind people up then that doesn’t make them a troll. People get wound up for all sorts of reasons but that doens’t make the person who annoys thenm a troll. It is a common mistake of people who think they are beyond question to call people trolls who ask them ligitimate questions.
I really think these are valid questions for somebody who presents his specialities as “Estate agency insight, estate agency law, customer service, media contact, social media, board level negotiations, UK estate agency, business/ ideas creation and development” and is passing comment on Estate Agency businesses (usually just one particular business).
This thread is about referral fees. It is not about some individual’s business or personal circumstance yet that is what have made it. As you so often do. Case proved. You are a troll.
>Case proved. You are a troll.
The only think that has been proven is that you don’t understand what a troll is. You don’t even understand the definition you just posted. Posting off topic doesn’t make you a troll. It is the intention to provoke. “with the intent of provoking readers into displaying emotional responses”
As for posting off topic…
“#PURP customers will be reassured that Purplebricks are helping them save money by using these solicitors.”
Was that on topic? Was your post “There are probably no more than about six people on this site that have any interest in what you spout.” on topic? Were you being provokative there which of course would qualify you as a troll.
As far as I’m concerned that comment from Chris Wood opened up the discussion to whether a business should be looking at saving money for customers or perhaps contraversially in CW’s eyes making money to pay creditors and keep shareholder funds in credit.
The point has been made elsewhere that it’s common practice.
Something he might want to respond to?
Well that’s not why I’m posting. I want a reasoned response. 99% of my posts are not aimed at winding people up (but if people have a go at me I occasionally let myself down). If somebody’s posts wind people up then that doesn’t make them a troll. People get wound up for all sorts of reasons but that doens’t make the person who annoys thenm a troll. It is a common mistake of people who think they are beyond question to call people trolls who ask them ligitimate questions. I really think these are valid questions for somebody who presents his specialities as “Estate agency insight, estate agency law, customer service, media contact, social media, board level negotiations, UK estate agency, business/ ideas creation and development” and is passing comment on Estate Agency businesses (usually just one particular business).
This is the most laughable **** you’ve posted since, oh, yesterday.
You are professional troll. A day does not go by where you aren’t trying to degrade, belittle, insult, embarrass or hurt someone. 99% of your posts are aimed at winding people up and provoking a reaction. Calling for someone to be banned from posting because they suffer from depression?
And judging by the amount of spelling mistakes in your posts may I politely suggest you spend your time swatting a dictionary before pointing your oh so perfect finger of judgement against others.
>Calling for someone to be banned from posting because they suffer from depression?
I didn’t call for anybody to be banned. Stop trying to put words into my mouth. There was a question mark after the statement yesterday.
The idea that somebody who is mentally ill can write what they want without receiving criticism back is itself a denial of free speech is it not?
So if somebody is mentally ill and the website are aware of it then they either need to stop them from posting or allow responses to their posts. It’s up to PIE to decide which it is but if they allow people to post then it is only fair that you can pass comment which is what people were suggesting I shouldn’t be doing.
I’m asking for you to be banned. Your comments and argument have nothing to do with the debate in hand. You have demonstarted a deliberater attempt to discredit another poster on an entirely different subject for your own personal agenda. You have brought nothing constructive to todays debate but as often, antagonistic.
And it’s long overdue believe me. What a sad man he is.
cyberduck46….
If you are going to “personally attack” posters you should be brave enough to reveal your identity rather than hide in the shadows.
It’s hard to take anyone seriously if they throw stones whilst hiding behind a wall.
You make fair points at different times on different topics however you must appreciate that when you really wish to get “personal” then you need to “man-up” with your identity.
I called someone out posting here last year and they got in touch with Ros to seek my details – Ros contacted me and I said I had no problem with that person knowing who I was.
When it all kicked off I invited the other party to go to court after a barrage of legal threats because I knew what I had said was 100% accurate and I had witnesses. Needless to say “that person” melted away.
My point is, if you are going to keep sniping away at someone, step out of the shadows, although frankly I think you going through Chris Wood’s Account is none of your business unless you are prepared to let him go through your financial history.
Move on cyberduck46, contribute in a fiesty manner by all means however your attempts to try and deliver some form of “exposure” on Chris is embarrassing to witness.
GPL, I prefer to keep anonynimity because most people are anonymous and some people who post on here appear a little unstable and I don’t really want them calling around at my house.
People like Robert May and Chris Wood are well aware who I am. Robert May mentioned that my company accounts were late so he’s obviously had a look.
I’m quite happy for you to get the information from Robert May about my Company if you want and I will discuss the accounts with you but would appreciate it if you keep things anonymous.
Chris Wood and Robert May post under their own names and use social media to promote themselves and their businesses. As far as I’m concerned that makes them different to somebody who chooses anonynimity and if they go around slinging mud and accusing others of bad behaviour or making misleading comments then they can expect the same back. I try and substantiate things I say so that people don’t have to take me on trust.
>My point is, if you are going to keep sniping away at someone, step out of the shadows, although frankly I think you going through Chris Wood’s Account is none of your business unless you are prepared to let him go through your financial history.
An interesting point raised there.
We’ve had a few PIE articles of late in relation to Online Agents’ accounts with reference to the finances. I dare say you passed comment but I could be wrong. Limited Companies, not PLCs.
Perhaps PIE could take a look at a few of the struggling traditional agent limited companies too in the name of fairness?
Cyberduck46, it’s about time you declared your real identity instead of hiding cowardly behind pseudonyms.
What I don’t understand is he has nothing whatsoever to do with our industry and yet is on here daily to abuse us and the industry in general…It is so strange. Has he nothing better to do? There has to be a motive.
Maybe his Mum ran off with an estate agent when he was a child or stood on and broke his train set whilst measuring up?
Intent to be Defamatory towards another poster. Reported to PIE. Your behaviour is disgraceful and unwelcome. Time PIE pulled the plug on you.