The word ‘free’ has pulling power, but is it in the client’s best interest?
There has been a considerable amount of debate in the mortgage advisory community regarding the use of free legals: whether it can be justified from an advice perspective, and whether it offers clients the best legal representation to ensure they can complete on their mortgage.
Recently, Nationwide Building Society doubled the offer term on its remortgage products from 90 days to 180 days. This was welcomed by a number of brokers for the reason that poor free legal services can mean a case overruns and this extension will give them peace of mind that they will still be able to secure the deal they originally wanted.
This is a somewhat odd state of affairs in that a lender offers a client a free legal offering that could mean a delay in conveyancing, resulting in a lender having to extend its offer time in order to mitigate against the delay in conveyancing through the free legals that it offered to the client!
And, lest we forget, a couple of years ago there were severe problems around free legal service offerings – caused by a major distributor over-loading conveyancers with backed-up free legal cases – which resulted in Nationwide stopping free legals as an option for clients – although this has now been reinstated.
Free legals can work for certain vanilla clients, but advisers know that their cases are increasingly unlikely to fit this mould. They know that free legals represent the lender, not their client, and that there is a danger of a severe delay that could leave the client high and dry, or indeed relying on a lender having extended their offer time recently. What if the client is going with a lender whose offer time does not cover all the free legal delays?
Is it worth putting the client at risk? The lure of the word ‘free’ is strong, of that I have no doubt. However, many remortgages have a cashback option that can cover most, if not all, of the conveyancing needs of a client. With this available, doesn’t it make sense to give the necessary conveyancing advice, secure the client the best service, and help ensure that they have representation that can deliver within the required timescale? I know what my answer would be.
Mark Snape, managing director, Broker Conveyancing