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GhostMortgage increases fee income

As a result of estate agencies and mortgage originators controlling the allocation of bond instructions, many conveyancing practices have been forced to cut back due to a loss of business. But while some firms are doing really well out of conveyancing as a result of strong relationships with estate agencies and originators, most are not.

It is difficult to assess whether the recent crackdown on conveyancing practices paying introductory commissions to third parties such as estate agencies and originators has had much effect, since there are obviously no statistics showing whether firms have stopped doing this - or whether they were doing it in the first place. The Law Societies are totally against introductory commissions because they almost always represent the buying of business, which is clearly not acceptable. However, there is nothing that precludes law firms receiving an introductory commission, provided they disclose this to their client.

Deregulation in UK
Conveyancing practices in the UK have already fought the battle of deregulation, and appear to have won. Of the firms doing conveyancing, only 400 of the 30 000 firms are "licensed conveyancers" - ie not part of a law firm. However, a spin-off of firms' fight for survival was that they became involved in a number of other services associated with conveyancing - one of these being mortgage origination.

Opportunities for SA law firms: lead generation
In South Africa, commissions earned from mortgage origination are much higher than in other countries, and this has introduced an interesting opportunity for law firms. With full mortgage origination, the consultant needs to know all the bond products on the market, and in addition to collecting all the documentation required for origination, a consultant also completes a lengthy application form.

The opportunity that presents itself in South Africa is that, since mortgage origination companies earn a higher commission than in other countries, they can afford to pay a significant introductory commission for leads. For this reason it doesn't make sense for conveyancing practices to go through the hassle of full origination - since they can earn a good commission for coming up with a lead, and if they are on the bank's panel, they secure the resultant bond instruction.

So lead generation is also a tool for firms both to earn lead commission, and to secure more bond instructions. And since commissions aren't shared with third parties such as estate agents, lead generation is quite legal.

One of the misconceptions in the industry is that law firms become involved too late in the transfer process to initiate bond leads. But in many instances firms do have an opportunity to ask their clients for a mandate. For example, where conveyancers consult on offers to purchase - such as private sales. And where staff, or their friends and relatives, need a bond. Other opportunities also exist with deceased estates, auctions, or divorces.

Some firms choose to incentivise their staff (conveyancing secretaries, for example) with a commission for introducing bond leads to the firm. Since the incentive is paid to staff, it is generally accepted that this doesn't represent buying of work.

Generate leads easily via GhostMortgage
With GhostMortgage, conveyancing practices capture fewer than eight items of information into the GhostConvey system, which is already used by more than 70% of conveyancing firms in South Africa. From there, leads are instantly sent to a mortgage originator, and a bond consultant contacts the client and arranges all the necessary documents and information for the bond application.

So GhostMortgage is an excellent way for firms to increase fees, and to determine their own destinies as they did in the "old days". In the first three weeks since its introduction, more than 250 firms have registered with GhostMortgage, and a number of these firms are already submitting leads via the system.

For more information on GhostMortgage, call 0800 422 636 toll-free, or mailto:

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