Title companies are cutting staff and hunkering down
When the real estate market slows down, Realtors work harder to win new clients, market what’s available and convince sellers to lower prices.
Title companies, however, must sit and wait, laying off staff and tightening budgets until the market improves.
When Realtors make a deal, the title companies guarantee the title of the property is free and clear for the buyer and ensure the lender is in the first lien position for the property.
"When they’re busy, we’re busy. When they’re slow, we’re slow," explained Michael Young, an escrow officer with Equity Title Agency.
As a form of insurance, title experts are severely limited in what marketing they can do by law. In times like now, there’s little they can do to be proactive and are forced to hunker down and wait for things to pick up.
Allan Spriggs, Summit County Recorder, said requests for transaction recordings has dropped 30 percent since a peak about four years ago. Some in the industry think this year might be down as much as 50 percent from last for smaller title companies.
Young said he’s seeing everyone from Realtors to mortgage experts trying to be creative. People who’ve been in the business awhile expect occasional downturns like this one.
"I don’t know any title companies that will go out of business," he said. "But I also don’t know one that hasn’t tightened its belt and maybe laid some people off."
Les England, office manager for Founders Title Company, said the restrictions on marketing are a non-issue right now.
"There’s no market to market to," he joked.
Realtors have told him to expect a slow market for the next 12 to 18 months. He said people like him who’ve been around for a couple decades just accept that in busy times you work a little harder and in lean times you relax a bit.
His office is still getting enough work to keep most employees busy, but has had to let a good person go recently and sees other offices doing the same.
Lois Hall, office manager for First American Title Insurance Agency, described her situation as a mirror of what’s going on with Realtors and lenders. In that role, she said the best thing a title company can do is to be as supportive as possible.
"It’s not like we can go out and change the market, but we need to be available and accessible to our clients to make sure we’re a good support for them in closing real estate transactions," she said.
Luckily for her, she scaled back her staff last year when the real estate market entered a slump. She hasn’t had to lay anyone off, but said her staff has become expert multi-taskers with everyone learning to do everything.
Hall thinks the silver lining in the current economy is that investors may tire of stock market swings and turn to real estate again.
Marc Brostrom with InWest Title Services said he sees his purpose right now as to prepare for that recovery and be ready for it.
He’s addressing the local lay-offs as a plus by trying to hire the most qualified and improve his own team.
Brostrom also said they’re rolling out new software and email programs.
There’s been a negative habit of companies not balancing priorities, he said. They will attract new business and then quit courting clients while they handle the work load, then market again when they run out of jobs. He sees the current situation as an opportunity to remedy that problem and guarantee a steady work flow when boom times return.
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