A wake-up call for the title and escrow business
October 29, 2006
Patrick Kitano over at Transparentre.com has a thought-provoking article on changes in the title and escrow business wrought by technology and the changing market. It’s a must-read for title reps and indeed for everybody in the business of providing ancillary services to Realtors and their clients — that would include mortgage folks, property and pest inspectors, and contractors and other tradespeople.
Every transaction needs an escrow officer, and the difference between a good one and a bad one can mean the difference between a deal that happens and one that doesn’t. Almost every transaction needs title insurance (the ones that don’t are those in which the owner is paying cash and chooses not to purchase it), and here in northern California the tradition is for the same company to provide both the escrow services and the title insurance. In Southern California these services are often split between two different companies.
A great escrow officer — and there are many of them — is a valued member of a real estate team and develops close relationships with the Realtors with whom he or she works. The sales force of the title and escrow industry — title reps — are also relationship-builders, and they’re always striving for ways to strengthen these relationships and help their Realtor clients build their businesses.
The value-added services provided by title reps go well beyond the culinary — despite the fact that Realtors are second only to cops in their love of doughnuts. Examples include:
- Help with creating disclosure packets and posting them online
- Creation of mailing lists and address labels
- Providing technology advice
- Offering the use of seminar rooms, LCD projectors, etc.
- Co-sponsoring marketing events
Transparentre asks two provocative questions:
- Can title and escrow companies afford to continue providing those value-added services in a market with fewer transactions and a time when the obscene profit margins of the title insurance business (with claim payouts in the single digits) are being challenged?
- Are those value-added services good enough for today’s technology era?
On the second, I think the answer is “Not as much as previously.” Many Realtors are coming up to speed pretty rapidly on the technology side and no longer need as much help with the old-world way of real estate marketing. What kind of value-added Internet-age marketing assistance should they be offering?
That’s the million dollar question.
Tags: Escrow services, Real estate, Title insurance