Where Have All The Title Agents Gone?

By: Kelly Goodale
As seen in: October Research Corporation
5/6/04

WHERE HAVE ALL THE TITLE AGENTS GONE? Preliminary results of landmark study of title agents shows medium sized agencies are disappearing nationwide... but there are lots of new companies entering the market to take their place

Richfield, OH May 6, 2004 — The Title Report, the most widely read news source in the land title industry, and October Studies, a division of October Research Corporation, announced today preliminary results are in on the landmark national survey of nearly 500 independent title agents across the country. Sponsors of the study include RealAlliance®, a nationwide network of independent title agents. According to John Dwyer, chairman of RealAlliance, "Given our dedication to partnering with independent agents in order to help them compete in an ever-changing marketplace, we are proud to lend our support for this worthwhile survey. It will provide our industry with valuable benchmarks and relevant market intelligence not currently available elsewhere."

Independent Title Agent Survey 2004 is the first comprehensive market report to measure the perceptions, technology usages, trends and business practices and relationships of the independent title agent. The telephonic survey is segmented by the four U.S. census regions. Participants in the survey are random-selected and then qualified by a minimum number of years in the business and by a threshold number of transactions closed in 2003. The goal of the survey is to deliver insight into the business thinking of today’s independent title agent. The survey also probes agents’ business exit strategies, participation in controlled business arrangements, trade associations and their overall outlook for 2004 – 2005. Telephonic interviews and the total number of agents participating in the survey assure that our final results will have a low margin of error.

With the boon in real estate sales and mortgagee-finance over the past year, it was expected that the number of independent title agencies would increase proportionately. But the survey shows a surprising increase of nearly 1,800 agents nationwide entering the market during the past two years, clearly a sign of how attractive profits have been in the industry. “That is a big number of new entries in any industry,” said Ellen Jacob, Director of Marketing for October Research. “We estimate there are approximately 12,500 full time, independent title agents operating today across the country and we think there may be a correlation between closing error rates the market is seeing and the inexperience of new agents in the business. We hope to have more quantifiable data when we are finished,” said Jacob.

Having completed roughly 300 interviews with agents nationwide, preliminary results indicate the complexion of the title agency segment of the industry has undergone a significant facelift. Where has the middle gone? Small, medium and large-sized agencies of yesteryear seem to be moving towards a one-size fits all, with a substantial amount of consolidation having already taken place. Of those independent agents surveyed to date, 80% of them are small, or less than $3m in revenue/sales. At the other end of the spectrum are large national agents. But those between small and large seem to be going away at a fast pace. “Owners of middle size companies have less of an appetite for risk and uncertainty and therefore have been selling their companies over the past few years, primarily to underwriters,” commented Jacob.

“The Independent Title Agent Survey 2004 is motivated by an industry that is quickly changing. Many independent title agents are positioning themselves for the future far differently than they have in the past. Nothing for them is what it used to be regarding technology, customers, and underwriters relationships. We believe many segments of the real estate industry are interested in knowing the perceptions of title insurance agents and their strategy in a market that demands package services. The independent title agent continues to be at the heart of the real estate transaction,” said Jacob.

Survey results will be published in three volumes:

• Part One: TITLE TECHNOLOGY 2004 – measures and analyzes independent title agents’ technology and software preferences, usage patterns, satisfaction and selection techniques and overall future outlook.

• Part Two: TITLE BUSINESS RELATIONSHIPS 2004 –reports independent title agents’ thoughts and preferences about underwriter usage, selection practices, and satisfaction with current underwriting processes along with key business practices relative to lenders, Realtors and builders. Perceptions of industry trade associations, including whether they effectively represent agent interests and whether or not more associations are needed are also addressed.

• Part Three: LARGE AGENCY PERSSPECTIVES 2004 -- surveys the largest agency operations in the country and reports their perspectives the same key technology preferences and business practices issues.

The survey is scheduled to be completed in the second quarter of 2004.

For more information on subscribing to the survey results, contact Kelly Goodale at 330-659-6101.

About October Research Corporation Located in Richfield, Ohio, October Research Corporation is the nation’s leading provider of market intelligence, business news and regulatory information for the real estate services industry. The company publishes a variety of information products and research studies including The Title Report, The Legal Description and Appraisal Intelligence newsletters. The Company also has two divisions supporting market research. October Studies has produced several special reports and studies including The E-Sign Perspective, The National Title Technology Survey, The National Real Estate Survey, The National Appraisal Survey and in 2004 The Independent Title Agent Study. The Seminar unit produced the industry’s first national audio seminars on RESPA, bundled settlement services and alternative title and mortgage impairment products. Today, October Research Corporation news and information products are used by over 250,000 real estate service professionals each week.

About RealAlliance RealAlliance operates nationally through a network of local title agents. These agents are committed to exceeding customer expectations by providing exceptional service in 48 states and every major U.S. market. RealAlliance offers underwriter strength (via United General Title Insurance Company, Attorneys’ Title Insurance Fund, Inc. and Connecticut Attorneys Title Insurance Company), personal attention and customized solutions on a national basis. RealAlliance offers its agents a suite of services that can be customized to meet the agents’ individual business needs. Through its agents, RealAlliance facilitates quality closings nationally.

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Related link: www.octoberresearch.com/studies/itas/