The coronavirus has been good to the real estate industry. Rock-bottom interest rates have set off an explosion of new home purchases and mortgage refinances. With a market this hot, real estate professionals can hardly keep up.
To meet the demand, new title agencies are popping up all over the country. With plenty of work for everyone, these fledgling agencies are poised to take off with a bang.
Ultra-low interest rates may not last forever. However, large numbers of people are now working from home and can live anywhere. Many of these folks are moving to areas with a lower cost of living than the pricey big cities they are leaving behind.
This trend is likely to continue, and it will keep homebuying activity high whether interest rates go up or down. Even if mortgage refinancing drops off in the future, you’ll still have plenty of business from new home buyers as long as you keep attracting new lender clients.
The Adverse Market Refinance Fee took effect in December of 2020. Initiated by Fannie Mae and Freddie Mac, it adds a 50 basis points fee of 0.5 percent to most mortgage refinances.
This fee can add almost $1,500 to the average mortgage refinance. It was instituted because of “market and economic uncertainty resulting in higher risk and costs incurred,” according to Fannie Mae and Freddie Mac. The additional cost may put a dent into mortgage refinance activity, but it’s unlikely to stop it as long as interest rates remain low.
If you own a title company, lender business can make you or break you. Should the homebuying market slow down, you can avoid being left in the lurch by attracting lender clients. Here are some time-tested strategies to ensure success.
Develop a Communications Portal
Innovative technology can integrate a title agent’s workflow software with a lender’s software. It eliminates the communication gap during closing. Agents and lenders can communicate without exiting their core software systems.
A good portal can deliver a customized closing experience for all participants. Everyone can access file information in real time from start to finish. All parties have online access to recorded documents, closing disclosures and final title insurance policies.
Provide High-tech Closings
Master the art of the quick digital closing with high-tech transaction services. Provide remote online notarization, eRecordings and eClosings. Digital closings are the future of the industry, so prepare your company now.
With the right software systems, you can offer lenders a final title insurance policy and closing package in 24 hours using their software’s secure online portal. Get licensed in multiple states so you can offer lenders even more closing convenience.
Offer Lender Discounts
Provide discounted preliminary title searches. It’s a powerful way of attracting lender clients. Offer reduced title insurance rates. It can lead to lasting refinance relationships, and it’s another way of attracting lender clients.
Special lender rates can substantially increase order counts and boost potential revenue. However, the increased volume is best handled by agencies with rapid production capabilities. An assembly line approach is the most effective way to maximize profits when dealing with low-rate orders.
Publish a Monthly Newsletter
Keep lenders up to speed about the latest industry developments with a snappy newsletter. Add content about escrow, title insurance and property searches for potential homebuyers.
Because of their unique position in the real estate industry, title companies should be marketing direct to consumers in addition to attracting lender clients.
Build a solid foundation by attracting lender clients, and it will keep you going strong regardless of market conditions. After all, people are not about to stop buying homes.