The pandemic has highlighted the cumbersome and slow process often found in the mortgage market. As a result, it has been great to see advisers and mortgage lenders adopt innovations such as electronic ID and desktop valuations to improve this.
However, with the stamp duty deadlines, the services from solicitors have been impacted. This spotlight has shown up some of the slow and archaic procedures in the legal part of the transaction.
So what can an adviser do to help their clients pick the right solicitor, whether it is a complex transaction or they are looking to beat a deadline?
The first question is, does the solicitor have the capacity to assist? Particularly with a deadline, a broker can coach their clients to question the solicitor on the solicitor’s ability to meet the deadline and the solicitor’s backups when there is a capacity issue.
Has the solicitor adapted any technology to assist the process? For example, is there a portal to track the legal process? Do they use emails for correspondence rather than the post? An adviser or their client can test a solicitor’s service standards by emailing early in the process and judging the speed of response.
Also, is the solicitor prepared to pick up the phone to resolve any issues? Many a delay is caused by written communication that does not fully explain an issue. Picking up the phone could resolve the issue in minutes and get the application moving again.
A delay at the start of the legal process can be avoided by the adviser double-checking the solicitor is on the lender’s panel. Not every lender will allow every solicitor to act for them. Where a solicitor is on the lender’s panel then ‘dual representation’ will be allowed. Dual representation is where the solicitor acts for both the client’s interests and also the lender’s interest. This means the client will have just one legal bill, but more importantly, time will be saved by not having two solicitors needing to complete work and communicate on the same client’s transaction.
Whilst dual representation is widely available for residential and mainstream BTL; some newer specialist BTL lenders may only have 2 or 3 solicitors a client can choose from if they wish to benefit from dual representation. Dual representation is not readily available in more complex markets, however, such as bridging or commercial.
For complex products like these, it is essential the broker helps the client to pick a solicitor who is both familiar with the product type and ideally the lender. Bridge lenders, in particular, can move very quickly. However, it is often when the application hits the legal stage that delays occur, negating one of the reasons the client may have needed a bridge in the first place.
The types of enquiries a solicitor may get to deal with on a bridge or commercial loan are significantly different to those of a residential loan, so choosing a solicitor experienced in this area will improve a client’s chances of a smoother transaction.
There are a range of software solutions available to advisers to quote and earn from solicitor referrals. But remembering the cheapest doesn’t always mean the best. Exploring a solicitors experience, service, capacity and recommendations may help the adviser and their client get to the end goal of completion sooner.