Wednesday, August 26, 2009

What do consumers want…

I mean what do they really, really want? When a consumer is choosing a title company with which to close their transaction, what are they looking for? For that matter, are they looking? If not, why? With all the press going to companies such as Entitle Direct where supposedly the consumer can save 35% on their title charges, you would be downright stupid not to shop around. The local title companies must only exist to prey on the consumer and charge exorbitant and outlandish fees from their neighbors. It seems to me that the mysterious stranger from out of town must always have your best interests at heart.

I would argue that Entitle Direct has actually hit on something with their approach. Consumers should absolutely shop around for title insurance! I can’t stress this enough. Title Insurance is a must. Your lender is going to require a Policy on a refinance and you must furnish clean title to your new buyer on a sale. But when it comes right down to it, a title policy is a title policy. So Entitle and others like them take the approach that if the end product is the same, then price must be the only factor with which a consumer should comparison shop. As Lee Corso would say, “Not so fast my friend.”

So if it’s not just price, what is it? The answer isn't that hard to figure out… Trust. The consumer must not only trust that the end product will protect them or their lender, but they also must trust that they aren’t being taken advantage of. The consumer wants to know that the policy they paid for is priced fairly and completed in a professional and safe manner. Why? Simple, in the end, Title Insurance is really Title Assurance.

Who can the consumer Trust? The internet is the wild wild west, anything goes. I don’t know anything about Entitle’s underwriting practices, but for the sake of this post, I’m going assume that they are even handed and accurate. But here’s the thing, you don’t know. They are their own underwriter, they don’t have to answer to Chicago Title, Fidelity National Title or Old Republic when they aren’t doing something correctly. Your local ALTA title agent does and has strict standards set by their underwriter. Some may call us the middle man, but we have checks and balances. The consumer has true Title Assurance.

Now as to the 35% that Entitle Direct is going to save you. I don’t fault them for marketing this way. I don’t know what the other markets they do business in are pricing at. I can tell you this though, in the Chicago Market, where I do business. I am going to save you 42% on a refinance… Not on some fictional rate but off of Entitle’s quote. IS that a special deal? No… That is every single day. Am I special? No, not really. The market dictates that a refinance should cost a certain amount in Chicago and Entitle is just that much more expensive.

Would I have put a link to the Entitle Direct website if I coulldn't beat them? So don’t believe the hype… Shop around, but shop local first! You’ll save time, save money and you’ll be Assured of that fact. You can Trust in that fact!

2 comments:

  1. Michael, thank you for reinforcing the message with your readers that consumers should shop around for their title insurance and title-related services; an informed consumer will always derive the greatest value, and it is also important for the title insurance industry's products and services to be better understood by consumers rather than as a footnote at closing.

    I would like to elaborate on some of the points that you have raised regarding my company, ENTITLE DIRECT. As you have stated, our message is that consumers should shop around, and our goal is to make the consumer experience positive and transparent in terms of costs when doing so. While we do use the Internet as a tool for achieving this, our services are not delivered anonymously through the Internet; every one of our customers is assigned a Specialist which they interact with on the phone or via email at the consumer's discretion throughout the course of their transaction, and all closing services are provided in person at a location of the consumer's choosing. EnTitle Insurance Company, which underwrites all of our policies, has a 30 year history and is rated A' Unsurpassed by Demotech, and certainly complies with all of the same regulatory and compliance requirements as the other underwriters that you have mentioned in the states in which we do business. Finally, our 35% discount is in addition to all of the other normal discounts which a consumer might be entitled to, such as a reissue discount, which cumulatively can add up to be quite substantial; of course, consumers can decide that for themselves as you suggest.

    Thank you again for your post and for providing an opportunity for discussion.

    Kind Regards,

    Fred Kauber, CIO - ENTITLE DIRECT

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  2. Fred,

    Thank you for your willingness to engage in conversation. I think we do share a common goal, informing the consumer. The more information that a consumer is armed with, the better our industry will be served. That said, I do take issue with some of your company's statements in the press and I will be posting my thoughts on those in the coming days. I look forward to a healthy dialogue.

    Michael L. Rubin

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