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.

We always give the client a "starting price" for commercial work, and we let them know that the actual price will depend on the amount of work involved, plus copies, of course.  As for how long it takes, we let them know that we will get it done as soon as we can, but again, it depends on how complicated the search is.  Unfortunately, that is never good enough for some clients - they want a fixed price and they want it back in a couple of days.

At one point, I decided that I was just going to quote commercial searches high enough that I could offer them a set price and give them an estimated turn around time that would leave us plenty of time to get it done.  That backfired on the very first order.  I quoted the search at $1,500 and told them that we would need a week to get it back to them.  The chain of title wound up splitting into seven separate chains and involved railroad property.  It tied one of my examiners up for the better part of three weeks, but we didn't charge them any more for the search.  My thought was that we might make it up on the next search that might turn out to be a little easier, but that didn't work either.  The next few times this client called, they cancelled the search after we gave them the quote.  Something tells me that they knew that search was going to be particularly involved when they agreed to the $1,500.

There is no good way to establish a price for a commercial search in advance.  You just never know how tough it is going to be until you have several hours in it running the chain of title.  I'm not going to risk putting in that much time and then having the client cancel the search if it turns out to be complicated and expensive.

Our traditional commercial clients understand the nature of commercial searches and they just trust us to charge them a fair price.  We have a good relationship with these clients and if we get one that turns out to be particularly difficult, we keep them apprised so they are not shocked when they get the bill. We know that they aren't going to cancel the search mid-way through.  And, with commercial work, that is the way it needs to be.  If the client doesn't trust their abstractor, they should find a new one.  But, they have to understand that some searches are going to take longer and cost more.  Asking the abstractor to guess at a price and expecting to hold them to it is ludicrous.

Searching commercial property takes a depth of knowledge that the average "current owner searcher" just doesn't have.  Commercial searches cannot be commoditized like the residential current owners have been.  However, I have a feeling that might be the direction that the industry is headed.  The less experienced current owner searchers are struggling right now, as are the rest of us.  They may be willing to dabble in commercial work and without an understanding of the complexities involved, they will more that likely be willing to quote ridiculous prices that would not be possible if they were to do a thorough commercial search.

Without some kind of crystal ball, you just don't know what might be involved in a commercial search.  Some are very easy - others are extremely difficult.  Until you do it, you just don't know.  You might find complicated leasehold interests that need to be searched, adding multiple parties to your list of names to check.  You might find an appurtenant easement that would require a search of an adjacent parcel, not even owned by anyone in your chain of title.  You might find a lawsuit involving the property owner, several leasehold tenants and creditors that could take hours to decipher.  Or... you could get lucky and find a deed, mortgage and assignment of rents with nothing else filed.

So, if you need a commercial search, use an experienced abstractor that you know can handle the job.  Give him the freedom to do what is necessary and trust them to bill you a fair price for the search.  And, don't rush the process!  Ask for a "ballpark" price, but understand that it could change dramatically depending on what comes up during the search.  If you can't deal with that, you shouldn't be doing commercial work; leave it for the more experienced firms.  Or, get your own crystal ball and hope for the best!

Robert A. Franco
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