In Scotland, estate agency firms can be either law firms or non-law firm estate agents. So what is the difference between a solicitor/estate agent and a regular estate agent? And what difference does this make to you if you are a property buyer or property seller in Scotland? Quite a lot as it happens…!
What Is a Solicitor/Estate Agent and Why are So Many Scottish Estate Agents Solicitors?
In Scotland, a lot of estate agency firms are also solicitor firms. A solicitor firm is defined, for the time being, as being a company that is registered with and regulated by the Law Society of Scotland. A degree of de-regulation of the Scottish legal market will take place in the next few years and it is likely that in a few years there will be other regulatory bodies that law firms can affiliate themselves with. However, for the time being the Law Society of Scotland is the only one.
Many of these firms are, first and foremost, law firms and do a wide spectrum of legal work as well as doing estate agency work on their clients’ behalves. Many refer to themselves as ‘Joe Bloggs, Solicitors and Estate Agents’. Several others have evolved into such multi-disciplinary firms whose main income comes from legal services, much of which doesn’t come from residential property, so they don’t even advertise their estate agency services in their firm names, describing themselves merely as ‘Jane Smith, Solicitors’ or indeed just ‘Jane Smith & Company’.
In some geographical areas of Scotland, the vast majority of estate agency firms are, at their hearts, law firms. In Edinburgh, for example, about 90% of property that is sold is sold through firms that are law firms. Much the same can be said for the Aberdeen area. Traditionally, property in Scotland was marketed and sold by solicitor firms. Non-solicitor estate agency firms in recent decades have made huge inroads into that marketplace. However, in some areas the dominance of Solicitors Property Centres (SPCs) has protected solicitors from the commercial threat of those estate agency firms: http://www.mov8realestate.com/blog/item/89-what-are-solicitors-property-centres-and-property-portals?-where-should-you-advertise-and-how-should-you-look-for-a-property-in-scotland?.html
What Are Non-Solicitor Estate Agents?
Traditional estate agency firms focus solely on marketing and selling property and don’t do the legal work (conveyancing – see below) themselves. Many of them are brand names within large ‘corporate’ estate agency chains that evolved in England. Others are branches or franchises of large international estate agency companies or franchise operations. There are of course many independent branches and chains of branches too.
Although there is a trade body (The National Association of Estate Agents), there is no compulsory, regulatory trade body for estate agents. That’s not to say that estate agents are any less good than solicitor/estate agents and I have no doubt that I’d be getting strongly-worded letters if I made such a suggestion. It’s just to say that they operate in an area where any code of conduct is largely voluntary.
In some geographic areas of Scotland. estate agents, rather than solicitor/estate agents, rule the roost and dominate the market. In Glasgow, for example, more property is sold by estate agents than solicitor/estate agents. In certain price demographics too, such as at the most expensive end of the market, estate agents are in the ascendancy.
What’s the Difference for the Property Seller or Buyer?
So how does this affect the property seller or buyer? Well, both buyers and sellers will potentially have a very different experience of the selling or buying process depending on whether they buy their property from, or market their property through, a solicitor/estate agent or an estate agent.
As I said, solicitor/estate agents are bound by not only by the law of Scotland, as of course are estate agents, but also by the rules and guidelines of the Law Society of Scotland. Failure to stick to these rules and guidelines can lead to disciplinary action against the law firm in question. In extreme cases, this can lead to the solicitor losing their right to practice law at all in Scotland.
Sometimes these Law Society rules and guidelines prevent the solicitor/estate agent from doing things that an estate agent can do. The reasons for this are well-meaning and are generally intended to make the process of buying a property in Scotland from a solicitor/estate agent fairer for the buyer than where they are buying the property from an estate agent. They can, however, have a knock-on effect upon property sellers that is not always entirely positive and which can come as quite a surprise to the property seller who has engaged a solicitor/estate agent rather than an estate agent. See: http://www.mov8realestate.com/blog/item/78-gauzumping-in-scotland-what-you-need-to-know.html