Key points from Seth Godin’s post titled Advice for real estate agents (quit now!):

• Order takers (those genetically programed dinosaurs who know the answer to every question, but bring nothing of real value to the table) are as good as extinct. 
  
• The down market offers infinite opportunities for real champions.
  
• You’re either fanatical about your product or you’re “invisible.”
• All real estate marketing is hyper-localized.
• Become the local go to person for anyone and everyone, even your enemies, that can benefit from hearing your message.
• Build blogs to communicate the “real information, not just data” that’s important to past and prospective customers alike.
  

Now comes the title industry …

Real estate agents have done a far better job branding themselves than have title agents.  There’s little risk of short term disintermediation for real estate agents because they’ve wisely positioned themselves as the point of contact within local communities.  They’ve aggregated audiences of loyal fans.  Real estate brokers, considering current models, couldn’t exist without their agents, particularly the top producers.

The title industry has employed a decidedly different business model.   Chronic anonymity complicated by a self imposed identity crises has been the by-product of decades of bad marketing choices by title companies.  I think it’s safe to say that many title companies have no marketing, branding, or positioning strategy at all.  It’s an error that can’t be corrected when boom markets turn sour.  The silent closure of a title company for lack of business goes unnoticed.  Why?  Most consumers don’t know what a title company is, what it does, or that it exists.

The title industry’s favored marketing tool of the past, a box of donuts featuring a stapled business card, is no longer an effective option.

Could title insurers replace their agents with a team of aggressive sales reps?  It wouldn’t be an easy accomplishment on the operations side, but I think it could be done quickly on the marketing side.  It’s something to think about in light of underwriter affinity for direct operations.  If title agents were to instantly disappear, I suspect that title orders would flow to underwriters in direct proportion to current industry dominance.  First American and Fidelity National would control about 70% of the market with the remaining players competing for any remaining business.  It really has nothing to do with technical superiority or claims ratios.  Underwriter dominance is determined wholly by management’s commitment to attracting and developing marketing talent.

As a value proposition, title companies have to build solid brands within their targeted audiences.  While many of you will continue to market only real estate and lender sources, the importance of internet transparency on consumer decision models can’t be ignored.

Title order pipelines have to swell with increasing percentages of consumer directed orders to remain viable in the future.

Title companies have to start championing themselves and the communities which they serve.  You don’t sell title insurance.  Your product is a complicated mix of reputation, credibility, and service.  And yes, the future of title company marketing lies in the power of Web 2.0 and the power to communicate interactively and selectively.  If you’ve never heard of Web 2.0, we need to talk. 

The boring, static web-sites that are the title industry standard have anthropological value at best.  They do nothing to promote business in the Web 2.0 business environment.   It’s not unusual to find underwriter logos featured on title company web-sites.  The practice results in confusion and possibly the branding of underwriters at the expense of title company irrelevance. 

Keep in mind: the underwriters that you’re marketing on your sites are often your direct competition for title orders.

This post is getting lengthy so I’ll hit my key points:

• Hyper-localized blogs offer unlimited opportunities for title companies to connect with consumers and other local sources of business.
• There’s no excuse for not blogging because it’s inexpensive and most title companies aren’t busy.
• Stop selling title insurance and title insurers.  Sell yourselves!  You are the product!  Become your own product champion.  Become fanatical about your title company.
  
• Use blogging to offer valuable information about your company, your community, and anything else that matters to real people.
• Use the internet to engage others.  It works.

Shortly, I’ll share links to some of my favorite real estate blogs with hyper-localized content.

 

Yesterday, I received the following comment on my Active Rain blog:

“I am new to your site - google-alerts linked me to you.  I have 25 years experience as a Searcher/Examiner, primarily from Southern California working for most of the major underwriters.  The Title Industry has undergone tremendous change in those 25 years, probably more so than in any other time in it’s history.  This is true of any industry, and in most cases “change” in necessary and beneficial.  However, in the case of Title Insurance, this practice of outsourcing searching/examining and policy production is not necessary nor is it beneficial.  Those types of positions have traditionally been the training grounds for higher level positions within the industry.  When I came into the industry, all of the Managers and Executives in the Title Companies had worked there way from the entry level jobs.  However, today, fewer and fewer of the Managers and Executives in the Title Industry have that background.  These new Managers and Executives are implementing changes to an Industry that they have very little understanding of, and the effects of those changes have diminished what was once a high quality, low risk product.  Today, title insurance is all about short-sighted “bottom-line” and shareholder profits.  This is an industry that is under more and more scrutiny from regulators and consumer advocacy groups.  Title Insurance is a vital product, considering the amount of money consumers are investing in real estate.  The leadership of the Title Industry, being those Executives that are trying to maximize profits for shareholders, better come to the realization that conservative underwriting practices, which can only be applied by seasoned, experienced professionals, is the only way to plan for future success and longevity.  That cannot be accomplished by outsourcing. 

Okay, I’ll get off the soapbox and let someone else have a turn.  I’m glad to see there are so many other people out there that seem to share my opinions on this issue.”

Key Points as Talking Points:

• The title industry has undergone tremendous change in the past 25 years
• Change is necessary; Change is good
  
• The practice of offshoring title searches and policy production isn’t necessary … nor is it beneficial
• Title searching was once the training grounds for industry execs … it’s no longer true
• The change agents are corporate decision makers who don’t truly understand the industry dynamic
• Title insurance is, or should be, a low risk, high quality product that consumers … and real estate agents … and lenders can trust
• Title insurance is a vital product
• Conservative underwriting practices ensure the industry’s success and longevity
• Offshoring is not the answer to the industry’s profitability and credibility woes

On May 11, 2006, I had the pleasure of addressing a group of title professionals in Roanoke, VA.  This morning, by chance, I came across my speaking points from the event.  My introduction, which is rewritten for every presentation, was a bit surprising and revealing given the nature of recent discussions on this site.  The consumer was the primary focus of my talk.  I surmised then, as I fully accept now, that the future of the title professional lies solely in the consumer.

In Roanoke, I said:

My goal is to convince each of you of the need to step out of the role of a business person and assume the more serious role of a professional. 

A professional earns respect. 

A professional understands that there will be times when the answer must be no. 

A professional understands that all decisions aren’t necessarily business decisions. 

A professional places the interests of others ahead of personal interests. 

A professional understands that his, or her, services have great meaning to the community and are of great importance to others.

A professional weighs the moral and ethical implications of every decision.

Today you will frequently hear words that aren’t often used in our industry, words like: accountability, loyalty, duty, credibility, respect, obligation, responsibility, and courage.

Focus only on the consumer and you will depart this earth having left behind the legacy of a professional triumph.

Focus only on the consumer and you will be able to sleep at night.

Focus only on the consumer and your children will respect you and you will respect yourself.

My thoughts nearly two years later: 

My greatest fear is the industry’s subversion of professional standards to strictly pecuniary pursuits.  I feel that it’s possible for professionalism and business practices to converge and exist harmoniously, but I reject any argument that the title industry has attained such lofty heights, nor does it have the potential of doing so any time soon.  For the title community, the word “professionalism” only has meaning in the context of the consumer.   As the trend towards the foreign production of title abstracts and commitments gains popularity, the professional endeavor that is a title examination will follow the path of the horse drawn carriage.  Of course claims statistics will increase dramatically causing great harm to consumers.  

That is, unless title professionals set aside their differences to unite for a cause greater than themselves.

 The public at large, inclusive of public officials, has fallen prey to a canard that deceitfully portrays a title policy as having merit in and of itself.  You and I know that a title policy is worthless, possibly dangerous, if the process leading to its completion is dysfunctional.  And dysfunctional it is in January, 2008.  The public isn’t aware of the critical “back room” activities performed by “traditional” title agents because the activities have inexplicably been kept secret.  We’ve made the grievous, possibly fatal, error of selling title policies and settlement convenience, when we should have been been selling the importance of our skills, judgment, and experience.

At the end of the day, it could be said that the industry’s leadership is concerned only about the interests of the five largest players, soon to be four.

Recently, I was asked if I’ve published a list of upcoming speaking engagements.  I have not to date and probably won’t in the future.  Most of my speaking invitations come from corporations or professional trade associations.  The events are typically closed to the public.  My unusual credentials almost always draw a full house.

As you might imagine, the current housing crises has been “center stage” during my recent presentations.

This past Wednesday, I spoke to a responsive group of real estate agents in Frederick, Md.  The elevated degree of receptiveness to my perspectives was a pleasant surprise.

My talking points:

• Only by examining its causes do we surmise that mortgage fraud is properly characterized as a national epidemic, not a series of isolated incidents.  
• Only by scrutinizing the motives of mortgage fraudsters do we recognize the cultural corruption of an entire industry. 
• Mortgage fraud statistics correlate directly to foreclosure statistics which in turn point to a breakdown of professional protocol, and standards, in residential real estate markets.
• The disparities between mortgage fraud and predatory lending are academic at best.  Unethical, often criminal, behavior demonstrated by loan originators, appraisers, real estate agents, and title professionals is the real world nexus that definitively binds mortgage fraud to predatory lending. 
• Legislation and judicial interpretation are not the answers.  Heightened professional standards among real estate practitioners are the crux of the solution.
• Class action litigation will change the form and function of the real estate industry in the next decade.

In light of the subsequently released Bush initiative, I would add that it’s apparent that the feds don’t see housing values rebounding anytime soon.  If they did, the proposal would include a recapture provision if gains were realized when the select group of properties were sold.
  
Bob Carney, who extended the invitation to speak, graciously wrote a post about the presentation for his blog, Focus On Frederick.com.

Click here to read Bob’s thoughts about the lecture.

While preparing for the Frederick invitation, I prepared my own analysis of current foreclosure statistics. 

The results are startling:

It’s a generally accepted fact that 1 in every 196 U.S. households is currently in foreclosure.  Notice I said households.

The U.S. Census Bureau estimates that there were 116,011,000 households in this country in 2006.

Using that number as the basis, simple math tells us that 591,893 U.S. households face the distinct possibility of losing their homes at this time.

A recently released study commissioned by the The United States Conference of Mayors estimates that an additional 1,400,000 at least, will occur in 2008 representing a market value of $316,000,000,000.  You read it correctly, I said 316 billion dollars.

What’s all this mean in practical terms?  In the absence of intervention in one form or another, roughly 5,178,922 men, women, and children could lose their homes between now and the end of next year, or sometime soon thereafter.

The numbers above represent a situation where every person living in the Washington Metropolitan Area were to almost simultaneously lose their homes.  The densely populated area includes the District of Columbia, 5 Maryland counties, 9 Virginia counties, and 1 county in West Virginia.

It’s as though every person living in the Tampa - St. Petersburg Clearwater Area and the Denver - Aurora Area combined were to lose their homes.

It’s the numerical equivalent to every person residing in the state of Minnesota finding themselves without a place to live.

In 2008, a citizen of this country will be 9.25 times more likely to lose their home to foreclosure than to die of cancer in any form.

I still have date availability for 2008.  Let me know if your professional group, learning institution, non-profit, or company is interested in bringing me in for a presentation.