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:

  1. 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?
  2. 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, , Title insurance

Written by Kevin · Filed Under Escrow services, Real estate, Title insurance 

Comments

5 Responses to “A wake-up call for the title and escrow business”

  1. Diane Cipa, General Manager, The Closing Specialists® on October 30th, 2006 7:30 pm

    Kevin: Patrick deserves kudos for a thoughtful piece. Overall I think he makes many good points. I have to take issue with the “value-added” items you are focussing on in this post. Every item is a RESPA violation except maybe co-sponsoring events. Co-sponsorship must meet strict standards to be permitted under RESPA. Title insurance agents are simply not lawfully permitted to provide these services. Without knowing it, you have provided a perfect example of what lies at the core of the industry crisis. IGNORANCE. Please don’t take that personally. I am certain you wouldn’t have posted this information on your blog if you thought it was illegal. Our real estate industry - Realtors, mortgage lenders, and title insurance providers - suffers from a deplorable lack of credible guidance from our trade associations. For some reason, no one has been taking this stuff seriously and now the title insurance industry is at risk. It’s a shame, but we can fix it. RESPAnews.com is a terrific resource. I suggest checking it out. (I don’t have stock in the company. LOL) They have a legal Q & A section with direct, easy to understand RESPA dos and don’ts. If every real estate agent, mortgage lender, and title insurance agent had to read just that section, we’d blow the cloud of confusion away.

    Thanks for the blog and thanks for a venue in which to chat about this important issue.

  2. Diane Cipa on February 3rd, 2007 7:22 pm

    Hi, Kevin.

    Consider joining us?

  3. Ammar Pasha on April 14th, 2008 4:33 pm

    I just wanted to ask you if you know Velocity Escrow located in Newport Beach, CA. Do you think its ok to do business with them and how do you rate them based on your criteria you mentioned in your article. Thanks

  4. Tom and Jean on July 22nd, 2008 11:33 am

    One Escrow company that one shoudl not use is Camden Escrow in Beverly Hills, this company is owed by 3 of the most dishonest men in the mortgage/real estate business. They have their escrow officers lie and hide charges on there closing statements ie yield spread premiums are not allowed to be shown on closing statements becasue they do not want their clients to know how much they are getting paid on a deal also they provide one HUD to the lender and a different one for the client. They also have shady people working in there mortgage offices who forge documents DO NOT USE CAMDEN ESCROW.

  5. Omar Domyaty on September 14th, 2008 9:49 pm

    Actually Ammar, I am in the real Estate business in Orange County,,, and i have heard alot of great things about Velocity Escrow. Heard their a really honest company. You should’nt have a problem with them.

Got something to say?