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Are Title Agents Becoming Obsolete?
by Robert Franco | 2009/02/04 |

In Ohio, and many other states, title insurance rates are filed with the Department of Insurance... and that is what title insurance costs.  Most of the underwriters file the same rates, so there is no difference between what an agent of one underwriter charges versus an agent of another.  Typically, the agent receives a 70 to 80 percent share of the premium for their services... and, they typically charge additional fees for the title examination and the closing.

But, what happens if one underwriter sells direct, cutting out the large agent split of the premium, and files lower rates?  That seems to be the strategy of Entitle Direct Group.  They have filed rates 35% below the other underwriters and claim they can save consumers hundreds or even thousands of dollars.

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Title agents are accustomed to competing with direct operations, even the direct operations of their own underwriters.  But, at least the prices have always been the same regardless of whether the consumer closed with an agent or the direct operations of an underwriter.  Here, Entitle doesn't utilize a costly network of agents - they sell direct online - and its filed rates are far below what any agent is required to charge.  Thus, there is now a cheaper alternative to a traditional title agent. 

That may be tough to compete with, but there is still an advantage held by the title agents.  They have brick and mortar offices in the local neighborhoods - they do business face-to-face.  The traditional referral sources, such as the Realtors and lenders, are familiar with the local agents and have developed good working relationships with many of them.  But, still, if the idea of marketing direct to consumers catches on, this could be disastrous for the small agents.

There is a lot to be said for the services that a local agent provides... but, for a second, let's put those aside and ask a simple question.  Are title agents even necessary anymore?

Ironically, title agents may have started the trend toward their obsolescence.  As many title agents grew beyond their local communities, they began utilizing the services of independent abstractors and contract closers.  The face-to-face aspect of title services has been slowly losing its significance.  Refinance searches have become very inexpensive - sometimes as low as $35.  And, some notary signing agents have been providing services for as little as $75.  By creating such a strong market for these services, is it really any surprise a new company would evolve to take advantage of it?

The agents provided the "proof of concept" for Entitle's business strategy.  Once it was shown that a company could service remote customers with independent abstractors and closing agents, the Internet provided a perfect medium for drawing them in.  Without the expense of maintaining agents to sell its product, it was able to file lower rates that nobody else can even come close to competing with.

The direct sales concept has met with some skepticism in Connecticut. It has been suggested that the attorneys that handle the search and closing functions will simply charge more for those services to make up for the revenue they lose by not selling the policy.  Thus, any savings from buying direct may be negated.

But Connecticut lawyers, who stand to lose the commissions they earn on title insurance, are warning that the savings in premiums could evaporate because they'll need to raise their fees to replace lost income.

Lawyers have long chosen title policies for their Connecticut clients and usually receive 60 percent of the premium in commissions, the maximum the state allows. In other states, where commissions are as high as 70 to 90 percent, real estate agents or mortgage brokers often place the insurance.

Entitle doesn't seem worried. 

If Entitle Direct customers decide not to hire an attorney, the company said it will handle the closing for an additional $425 fee in Connecticut and arrange a title search for $295.

It remains unknown how many consumers will be comfortable working with an online company to handle such an important transaction.  But, more and more people are doing more purchasing online, so it is likely that the trend will continue in that direction.  The more people become accustomed to transacting business online, the less the face-to-face aspect of real estate closings will influence decisions - especially when significant savings can be realized.

I much preferred this business when it was largely localized to the county where the property was situated.  Local title agents knew their customers and the county officials.  But, we are past that now.  Whether buying title insurance online, or from a title agent half a state away, the localization has been lost. 

The business dynamic is changing and surely some will welcome it and some will dread it.  But Entitle's novel approach may be tough for local agents to compete with. 

Robert A. Franco


Categories: Innovation, Title Industry

1211 words | 16524 views | 8 comments | log in or register to post a comment

Agents Are Not Done Yet

HUD's new rules, which I believe will become mandatory in January of 2010, put a big emphasis on direct marketing to the consumer.  It's all about the bottom line.  And the dynamics of settlement services sales will change dramatically.

If Entitle Direct's model is successfull, others will follow.  The underwriters will lower their filed rates to compete.  In the mean time, some of those charges, such as for the title exam and endorsements, will be eliminated.  Illinois does not have a floor on fees.  Underwriters and agents may charge as little as they can tolerate - and they do. 

The underwriters have been driving down prices in the chicago area for years, and setting up sham AfBAs too.  There are still plenty of legitimate agents that they have failed to drive out of business, hard as they have tried.

The silver lining I see in the direct marketing scheme, in which the consumer is encouraged to shop for settlement services, is that it could create a larger market available to the reasonably priced local agents.  This is the business that the lenders who are too big to fail send through the vendor managers who are too big to equal the service of a local agent at a reasonable cost.

by Patrick Scott | 2009/02/04 | log in or register to post a reply

A Title Agent's Perspective

There definitely does seem to be a decline in business for title insurance agents. There was a time when a buyer would not consider purchasing real estate without legal representation. As part of that representation the a Connecticut attorney would perform the title search, perform the closing, issue both mortgagee's and mortgagor's title insurance policy and record the deed and mortgage within 24 hours of the closing. However, the "do it yourself " attitude of many buyers and pressure from the lenders, VM's, TC's and signing services to get everything done as cheaply as possible to maximize their profits is taking its toll.

In Connecticut the average attorney's fee to represent a client in a full closing including acting as disbursement agent is around $500.00 to $750.00. If he issues the title insurance policies for both lender and buyer (generally recommended because it costs less to have both policies issued at the same time) he might be able to pick up and additional $400.00 to $600.00 in agency commission. While the supplement of the proposed additional $425.00 might work to recoup the attorney's loss... it is questionable whether further price wars will not also reduce that to an unacceptable level. The result may be a sharp reduction in the number of attorneys willing to practice in real estate. This recently occurred in the area of worker's compensation in Connecticut. The fees became so low that few attorneys wanted to accept these cases.

In recent years I have noticed pressures from a number of sources to reduce costs on all fronts...title search fees...attorney's fees ...title insurance agent's commissions. We all know what a joke the fees for title searches have become. It would appear that title insurance agent's commissions will follow. In recent years I have been approached by entities with what they thought were irresistibly attractive offers some of which included a request that the agency commission be forwarded to them as well as a proposed attorney's fee reduction to sharply less than market value.  It was not difficult to reject their offers. During the past four years I have seen the volume of business decline with respect to title insurance agents. It appears that the Title Companies have somehow absorbed this function, and are bypassing the attorney/insurance agent. I am not really certain how they are accomplishing it in Connecticut since title insurance policies are required to be issued by attorneys.

The end result is that real estate is gradually  becoming less attractive as an area of an attorney's practice. In my case it is starting to take a back seat to other areas  such as litigation.

by Kevin Ahern | 2009/02/05 | log in or register to post a reply

A discount? Really?

Beware the "discounts" advertised by operations like Entitle Direct. 

Their discounts are on the premium only.  In states like PA, they have a number of "additional" charges (some of a questionable nature) listed in the fine print of their web site.  In many cases it serves to wipe out any savings from the premium discount. 

All the more reason for consumers to carefully shop - not just for price, but for quality and reputation.

by Dave Wirsching | 2009/02/05 | log in or register to post a reply

Raising Awareness of Consumer Choice in Title Insurance

I am the CIO of Entitle Direct. We are excited and proud to bring change and value to the title insurance industry, and very much appreciate blog posts such as this one that help to raise awareness of the choices that consumers now have.

While title insurance is still not well understood by consumers when compared to other financial products, they have never had such an opportunity to become educated shoppers thanks to the wealth of information available on the Internet; as they become more well informed, they are also more open to the direct model and the savings it can afford. We are pleased to make the direct option available, but I also wanted to highlight that we have a 30 year heritage of offering our products through agents and continue to do so today. The direct and agent model need not be mutually exclusive, as there is a wide variety of customer preference in the marketplace.

The intent of the preceding blog comment seems to be to raise suspicion regarding the direct model, and that is not an uncommon reaction to change. As our web site http://www.entitledirect.com is referenced as having additional charges in the fine print, I invite readers to generate their own quote so they can review not only the savings to be gained on our premiums, but to also review the cost-effective closing services that we also offer and which are fully disclosed in bulleted fashion beneath the premium quote for comparison against other settlement services providers.

Our commitment is to be transparent in our dealings with consumers and there is nothing hidden in fine print. We encourage consumers to check us out and make that decision for themselves; to that end we also offer a toll-free number on our site that the consumer can use to talk to our title insurance specialists to answer any and all questions that they may have about the closing process. We are happy to educate consumers so they can make an informed decision when it comes to title insurance, and we encourage them to comparison shop so they can be confident in that decision.

by Frederick Kauber | 2009/02/05 | log in or register to post a reply

PA Fees


Fees are pretty closely regulated in PA. What fees are outside the PA DOI/Tirbop agreed fees allowable on the Hud 1?

I looked at the rates and there seems to be plenty of value there and costs where diclosed upfront with the rate. Let us know. THANKS

by Steve McDonald | 2009/02/09 | log in or register to post a reply

What Kind of Claims Reserves does Entitle Direct hold?

Entitle Direct seems to be a Title Insurance Underwriter - Correct? If so, what kind of reserves do you hold for claims, and did you have to obtain individual state licenses in all states you work in?

Also, do you anticipate that the massive changes, required  in the HUD-1 settlement statement as of January 2010, that do not allow you to price separate fees will affect your pricing?

by Jeanine Johnson | 2009/02/09 | log in or register to post a reply

Entitle Direct

Please see my latest blog post at:


For my detailed feelings on Entitle Direct.  I find them to be quite interesting in model and formula, but quite overpriced for my marketplace. 


by Michael Rubin | 2009/08/26 | log in or register to post a reply

PA really isn't that well regulated

Steve - thanks for your participation our forums.

Unfortunately, there a several fees that are lightly or not at all regulated in PA.  Most title agents don't charge them, but there are a growing number of operations who have realized that they can be a huge source of unearned income, and most consumers end up none the wiser. 

My favorite is the Settlement Fee. While the state would like them to be reasonable and only for instances when the borrower requests settlement in a 3rd party location (like their home).  I've seen actual HUD-1's with the charge ranging from $150-700.  Several instances the settlement clearly occurred in the lender's or title agent's office.

When I originally posted above, Entitle was listing a settlement fee somewhere in the neighborhood of $400.  It appears now they do not list is as a fee, but instead have buried it deep in one of their HUD description documents: 

You may arrange for EnTitle Insurance Company to perform your closing. This fee
is paid to EnTitle Insurance Company or another settlement agent chosen by you. Responsibility for payment of this fee should be negotiated between the seller and the buyer.

So much for transparency - now the "cost" disappears from their online quote, but it will still come out of the consumers pocket at settlement time.  Not like you can close it yourself.

Again, I strongly encourage consumers to shop very carefully around "discount" providers, especially ones who only pay lip service to transparency.

by Dave Wirsching | 2009/11/05 | 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



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