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Source of Title Blog : Commercial Searches

Wanted: New Crystal Ball
by Robert Franco | 2008/05/21

We are starting to see more clients sending us commercial work.  Ordinarily that would be a good thing, however, some clients just don't seem to understand the nature of commercial searches.  The same "cheap and fast" mentality that dominates residential work these days just doesn't translate well in the commercial realm.  Some of these clients call and ask if you do can do a commercial search, then they want to know how much it will cost and how long it will take to get it done.  My crystal ball must be broken because I can never find a good answer to those questions.

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Categories: Abstractors, Commercial Searches

Source of Title Blog :: 7 comments ::

The Abstractors' Last Bastion
by Robert Franco | 2007/03/29

In other posts I have hypothesised that the decline in title standards and price will lead to a shortage of skilled, professional abstractors. It only makes sense that as the title standards are "dumbed down" to allow for the inexperienced, untrained abstractors and on-line searches to provide "useable" title evidence its value and price will plummet. We have seen that with many searchers providing current owner searches for less than the going rate 12 years ago.

The problem is that with this segment no longer being profitable for "real" title abstractors to expend their time conducting thorough title searches, some are just not able to justify remianing in the business. Source of Title has received an unusually large number of notifications that several companies listed in the directory are no longer in business.

The current owner searches have always been a foundation of the abstractors' businesses. With that market slowing down, and more of the remaining business going to India, inexperienced abstractors, and automated searching alternatives, abstractors are forced to rely mostly on full searches which are not as abundant, nor as profitable. This will have two effects, higher prices and fewer experienced abstractors.

Commercial work may be the last bastion of the abstractor. Clients who need searches for commercial transactions understand the importance of a thorough title search and they generally allow more time to complete them and are willing to pay more for quality work. Unfortunately, commercial work is not as prevelent as the current owners once were. Good abstractors are not able to afford to wait around for the next commercial order and without a sufficient base of other work to fill the gaps, they will not be around to provide thorough searches to those who still desire them.

I bring this up today because I received a call from a good client that does a lot of commerical work. He expressed that he was having a very difficult time finding an experienced abstractor who was willing to do commercial work. This may be the last segment of the industry to embrace the skilled, professional abstractors.

I believe that this may be the first sign that I was correct with my prediction. There are only two reasons that someone would turn down commercial work: (1) they are too busy with current owners, which is not likely; or (2) they do not feel qualified to do commercial work. Apparently those who do feel qualified are getting tougher to find.

I believe that this trend will continue. Without the base of work the professional abstractors rely on to get them through the slow times, there will be fewer of them to train new abstractors to provide the quality of work that is needed. It will be interesting to see how the market compensates for this phenomenon. Either title companies will be forced to hire and train their own abstractors who will travel great distances to do their work, or they will have to reduce their search standards to allow for commercial transactions to close on current owner searches or online alternatives.

The title industry has headed down a path that will cause the extinction of the professional abstractor. Without them, title insurance will become a casualty based line of insurnace because getting a thorough title search will no longer be possible.

Robert A. Franco
SOURCE OF TITLE
rfranco@sourceoftitle.com

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Categories: Abstractors, Commercial Searches, Title Industry, Title Standards

Source of Title Blog :: 9 comments ::

Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

 

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