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Source of Title Blog

Frankenabstractors
by Robert Franco | 2007/09/13 |

Replacing abstractors with computers seems to be the latest rage in the title industry. Tap a few keys... hit print... take the search to an in-house "examiner" to review and voila! But, there will always be those few items you have to check at the courthouse. For instance, our home county maintains a special assessment book that contains tax assessments that don't get entered into the computer until they are ready to print the tax bills. There is a foreign execution book that is still handwritten in the recorder's office. And, our probate records are not available online at all. It's just not quite possible to cut the "human abstractors" our of the loop all together... not yet, anyway.

 



When the "higher-ups" try to eliminate the need for abstractors by implementing thin title plants there are some nasty side effects. There is less volume of work for the abstractors. Even though there will still be a need for real, live abstractors to check those items that are not available electronically, and to do the searches that are too complicated to be done online, "good" abstractors cannot make a living doing the left-over work at today's prices. Common sense dictates that even the simplest jobs will be more expensive because there isn't as much work available to spread the cost over.
 

Source of Title Blog ::


We used to average around 20 current owner searches each day, now we are down to only a few. The full searches that take much longer to complete are still coming in, but, without the easier current owner searches, we have to charge more to do the complicated work. When we had a nice mix of work, we were able to do the really simple miscellaneous work as a courtesy and we were able to keep the prices for the full searches very reasonable.

When we were busy doing current owner searches, we were more than happy to do quick miscellaneous searches at no charge. If a client called and wanted a copy, or they needed us to check for a release before a closing, or do last minute check for a new buyer... we just did it while we were there, for free or a very nominal charge. Now we have to charge a higher "miscellaneous fee" because we are getting a disproportionate share of those requests (Tax & Legal requests, mostly). We can't send someone to the courthouse just to check a few things at no charge. A lot of the things we used to do as accommodations for our clients, we simply cannot do anymore.

The routine current owners allowed for abstractors to balance everything out. The really simple stuff could be done for free and the more complicated searches could be kept at modest price. Whether we get 20 searches or 2 searches, there is a minimum amount that we MUST bill every month or we won't be able to stay in business to do ANY work for our clients. Without the relatively constant base of "normal" work, clients should not be surprised to see higher fees for the remnants.

The current slow-down is going to last a while. I believe that many of those who thought they could get into this business and make easy money will move on to other endeavors. Once that happens, those that remain will modify their pricing structure and the consistency we have had with abstracting fees will be gone. There won't be standard prices for current owners and full searches - instead there will be more pricing on a per-job basis, much like the commercial work is handled today.

After all, there is no such thing as an easy current owner anymore. Most of those are done online or overseas. It used to be that we could balance out the tough searches with the easier ones and it was really a win/win situation for the abstractors and their clients. The searchers could depend on steady revenue and the clients could depend on consistent prices for the various search types.

Short of creating a computer with arms and legs, or a "frankenabstractor," the abstractors are going to have adapt to coexist with the technology that is cutting into the volume of work. I'm sure it will all work out in the end, but it won't look like it does now. In some respects it may even evolve into something better. We will just have to wait and see.

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




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Categories: Abstractors, Billing Issues

1010 words | 6093 views | 4 comments | log in or register to post a comment


Great article. Hopefully, all this...
Great article. Hopefully, all this title plant and overseas will come back to bite the title companies and the banks in the butt. Wouldn't that be delicious! SC is an attorney-only closing state which I think helps us. Some companies still close loans without attorneys, or use out of state attorneys, factory attorneys, but very few. Our attorney general has cracked down on lending institutions closing loans without a local South Carolina reviewing the work.

I have been abstracting for 21 years, and I remember the day when searching a title was easy. You never found anything wrong, or practically never. Now you find something wrong with every search you do. Think that might have a little to do with title plants, current owner searches, two owner searches that you can actually right title insurance on, lawyers that don't have a clue as to how to complete a title search themselves, and think that if it is recordable, it is right, and last but not least abstractors, or so-called abstractors who would not have a clue as to how to complete a 40-year search. You cannot call yourself a true abstractor unless you complete all searches, including complicated commercials, and you know what an attorney needs to close a loan.

When I opened my own abstracting business ten years ago, I drove 200 miles to talk to the attorney that taught me how to abstract. I wanted his input on my title letter and general advice. He is a genius! You ought to meet him. My attitude when I started my business, was that if the bottom fell out of the real estate market, I could always work foreclosures. Well, guess what foreclosures are down too. Great! Banks are bending over backwards to not foreclose on property, taking short payoffs, anything to keep the property out of their inventory. What is in inventory is going for much less that the bid at sale. You can really get a deal buying foreclosed property now. I personally think, that the banks are holding off on foreclosures because if the banks took every piece of property that they could foreclose on, this country would be thrown into a severe recession, if not a depression. Saw this happen in the early 80's. I have been in real estate in some form or the other for 30 years.

On another subject, which I responded to a couple of night ago, on a forum, I think. I am so tired of seeing comments about not being able to collect fees. I don't have a problem collecting what is owed me. I only work for attorneys. I don't work for title plants. I do very little current owner work. I have set fees for everyone. If a title plant calls me, I refuse to cut my fees. I have worked for a few title plants, doing current owner searches, and the like. I did not work for any of them for very long. They don't want to pay you in a timely manner, if at all. They pester you to death, and act like they are the only client you have. I have found that it is just not worth it.

 
by Janis Talbot | 2007/09/13 | log in or register to post a reply

Thank you Janis! That was an excell...
Thank you Janis! That was an excellent comment - one of my favorites since we launched the blog. 
by Robert Franco | 2007/09/14 | log in or register to post a reply

In this county in Upstate New York,...
In this county in Upstate New York, we also have only limited information online, with very, very few assignments of mortgages available, only around 30 years of deed/mortgage index, and nothing at all in Surrogate Court (Probate). In many of the counties we serve, there's nothing at all available online. Not exactly the kind of records systems that lend themselves to offshoring.

However, I think we can expect a general downward pressure on the amounts we can charge for search work. Our company has been approached by an offshore company to perform searches (at a big discount, of course). As far as I know, we're not going to take the offer, but I'm sure someone will. When that happens, we could see fees cut in order to remain competitive, and further cuts until "abstractor" is just another low-wage job, considered the equivalent of an "associate" at Wal-Mart. I hope it never happens, because I have always taken great pride in the accuracy and completeness of my work. When I was a paralegal, one of the attorneys I worked for put a comment in my employee file that I knew "more about title than most real estate attorneys".
 
by Brendan Byrne | 2007/09/14 | log in or register to post a reply

Just a loonie thought...

Excellent discussion. So many great points.

I've always wondered, as far as the online searches go, why don't counties charge more for people using the system who are located outside their country, and then even more if you're outside the state, and then even more again if you're outside the country.

It seems to me that keeping access to the system locally is beneficial to everyone. Say, if you lived in country x, and you pay taxes in country x and contribute to that local economy by spending money there, your online fee would be $25.00 per month. Say your business was located in State, but outside the county, your fee would be $50.00...and if you were out of state, then why not $200...and out of the country, $1,000...???

Why shouldn't the county clerks rate their fees in this manner, and why don't we put pressure on them to do so? It would actually benefit the industry if local examiners were better able to compete with 'title plants' who set up location in out of the way places, and really contribute nothing to the local economy....

We do this will other state and country services, such as College tuitions, public recreation systems, and parks...Why can't this be done with information systems?

Garret

 
by Garret Fitzgerald | 2009/07/06 | log in or register to post a reply
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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