Well, we are now into a new financial year, and it is an opportune time for you to reflect on a key aspect of your business:  your fees.

As we all know, government organisations, including Revenue NSW, NSW Land Registry Services Councils and Government property enquiry departments regularly raise their fees at this time of year. These annual increases occur regardless of their specific cost fluctuations.

Small businesses, on the other hand often neglect this essential practice failing to ensure that their costs are covered, and their profit margins are maintained.

Some of the cost increases like the ones mentioned above can be passed on to clients through disbursements. However, it’s important to consider that your input costs also rise every year. This includes staffing, rent, insurance, software, travel, and tolls. Therefore, a regular review of your pricing structure should be a key part of your annual business planning.

A consistent theme of AIC NSW education program over the last few years has been the need to ensure that you review your pricing and increase your pricing to be ensure your revenue equals what you are worth.

However, a common concern is that raising prices in a competitive market will lead to losing clients. You may be of the view that increasing your fees might lead to losing a few clients, but the client you lose are most likely the ones who are most time-consuming and least profitable. By letting them go, you’ll free up more time to dedicate to your remaining clients, allowing for better service and potentially reducing risk because you have more time to spend on your files.

Take Action: Review Your Costs and Pricing

During the next few weeks, dedicate some time to analyse how your costs have increased over the past year or since your last price adjustment. Develop a strategy to ensure you start receiving fairer compensation for your services.

The Value of Conveyancing Services

Conveyancing is arguably the most critical component of a property transaction, yet it almost always receives the lowest compensation compared to the other parties involved. Consider a $1 million property transaction. The moneys flowing to the parties involved could reasonably be estimated as follows:

  • Revenue NSW: $40,000
  • Real Estate Agent: $15,000
  • Mortgage Broker: $5,000+ (with potential trailer commission)
  • Property Styling and Advertising: these are even higher than conveyancing costs!

So, let’s all make a point of reviewing and increasing our fees and ensuring that we provide the best service available in the market and start to get paid what we are worth. This should become an annual practice to ensure we are eventually valued and compensated appropriately.

Shifting the Perception: Trusted Advisors, Not Unpaid Tax Collectors

Raising prices can feel uncomfortable, but the EOFY presents a perfect opportunity to explain the rising costs within the electronic conveyancing ecosystem to your clients. Make price reviews an annual event, and hopefully, over time, the value you provide will be reflected in your fees.

So, change the negative narrative of being unpaid tax collectors for the NSW Government, and become a positive valued advisor trusted by the NSW Government to deliver your services.

Chris Tyler