What more can we say about 2020 that hasn’t already been said? The real estate and title industry in the United States seems to be operating on a different plane compared to other industries. Recording-breaking title orders and revenue continue, home prices are soaring, and deals are closing quickly despite the recent spikes in coronavirus cases.
To help us distill what’s happened this year, we gathered some industry experts for our 2020 State of the Title Industry Roundtable where we discussed the results of our survey of over 450 title and real estate professionals. Here’s a recap of that webinar in case you missed it!
We invited Dian Tomb, CEO of the American Land Title Association, Melissa Murphy, General Counsel for The Fund, and Robin Morgan, closing agent, and training specialist for Lenders Title to join us for this year’s discussion. Although we had some technical issues with Diane’s audio, we covered some important topics which included the biggest challenges facing professionals, what real estate agents look for in a title company, adapting to changes in real estate (like RON!), and more.
In the report, we broke down respondents’ answers to their biggest challenges based on job roles. The prior year, we saw those in leader positions rank cybersecurity and/or wire fraud as their third biggest challenge, but this year it dropped out of the top five completely.
When asked if this was a concern, Melissa Murphy replied, “I think that is significant because it continues to be the number one threat to each title agent’s business because most title agencies and law firms can’t withstand the economic impact of being tagged with the cost of wiring $400,000 to a criminal.”
She goes on to explain why this challenge may have dropped off the radar for some professionals. “We talk about pandemic fatigue. I think title agents and attorneys sort of have this cybersecurity fatigue.”
Robin Morgan added, “We are the guardians of the fund first and foremost. Over everything else that we do as agents, we have to make sure that we’re guarding those funds.”
To her point, minimizing the threat that wire fraud poses to the consumer and title agencies is a benefit to the cybercriminals lying in wait for one professional in the transaction to make the wrong move. Every day the hackers learn more about the industry and how to circumvent the protections you put in place, so as exhausting as it may be, staying vigilant and up-to-date on cybersecurity best practices is an important part of today’s agent responsibilities.
Want to see more responses for title and real estate agents? Download the full report!
What do real estate agents look for in a title company?
This was the first year that we asked real estate agents for their feedback on working with title insurance companies, and the majority said that they work with or recommend up to three title companies to clients on a regular basis. When asked to list what characteristics they look for in a title company, communication was the word that dominated the open-ended responses.
Improving communication between lenders, title agents, and realtors isn’t always easy, but it’s a necessary part of building those key business relationships. The success of the closing for all parties hinges on clear communication.
In order to reach the top spot on a real estate agent’s recommendation list, Melissa said, “My high-level recommendation is that the title agents and attorneys out there that want to build relationships out there with real estate agents, ask those people the same question that this survey asked them. That not only clarifies what your mission is but it allows that real estate agent to have input. It is the first step in building a relationship with that potential referral partner when you show that you care about their opinion.”
Robin said, “I think it’s also important that once you’ve established that relationship with your client partners is that you’re able to then set realistic expectations between each other. You have an open dialogue… so we can collaborate and have a successful and smooth closing transaction.”
She also reminded the audience, “Now that we have so much technology in our toolbox. We need to be educating our clients on how to use the tools that we’re offering.”
Adapting to Changes in Real Estate
In life as well as business, change is an important part of growth, so we wanted to know what, if any, changes title professionals expected to make to grow their business. We released our survey earlier in the year before the United States felt the full impact of the COVID-19 pandemic and continued to receive answers throughout the summer.
Regardless of when respondents answered this question, the majority said they anticipated making some sort of change in the coming year, and when asked what that change was, remote online notarization, eNotarization, or some other form of electronic notarization was mentioned most frequently.
When implementing the new technology, Melissa cautioned, “They really need to understand what RON can do for them and what it can not do for them. That might vary a little from state to state. In terms of the technology of RON platforms, there isn’t that much difference in how it works.”
Oftentimes, adapting to changing technology in the real estate and title industry is hampered by the fears or processes of partners who aren’t yet ready for the change. Robin noted, “In our market, we’ve found there’s been some hesitation from lenders allowing agencies to use RON. They still want their clients to come in and sign the documents in person or mail away the documents. So I think it’s going to take a little time for them to embrace that technology just like any technology. I think RON will catch on, but it will be a slow process.”
Slow and steady wins the race, and when looking at the numbers, year over year, we see growth in usage of RON or some other form of digital solutions in closings. Diane said, “We’re moving in the right direction. Right now many states have different versions of RON, sometimes we call it RIN, so what we’re trying to do at the federal level is pass the SECURE Act, which would standardize it across the country.”
She goes on to describe all the positive ways the tool helps customers beyond the general convenience of closing in your own home, it’s incredibly helpful for those who are elderly, sick, or experience mobility issues.
“It is a fabulous tool, but it can be even better than the current state of the technology and implementation of RON,” said Melissa.
Despite the curveball that the coronavirus has thrown in 2020, all of our panelists took an optimistic outlook on where they think the real estate and title industry is headed in 2021. The real estate and title industry has remained strong and has served to buoy the economy as a whole.
“People are going to want to buy and sell homes. They are going to move, and so I’m confident that it will remain strong,” said Melissa.
Robin added, “I’m very excited to see that our industry has accelerated toward using new platforms and tools… Whatever our challenges may hold for us for 2021 as long as we can hold open dialogue and great mature conversations, we can excel in this industry to be better than what it’s been. We’re all professionals and strive to be great at what we do.”