Looking to improve the borrower experience? Prioritize Title
Consumer demands are constantly changing, driven in large part over the past few decades by the hands-on, customer-centric approach that the world’s Airbnbs, Ubers and Zappos have ushered into the collective consumer consciousness. This reset and increase in consumer expectations is not limited to online experiences alone but now extends to all forms of commerce. Consumers today expect the “Amazon experience” online, offline, and everywhere in between, including the oft-maligned real estate and home buying process.
Buying or selling a home, or trying to coordinate the two simultaneously, is an incredibly complex process for even the most experienced consumers, not to mention the inexperienced majority for whom buying a home isn’t just territory. unknown, but also probably the biggest investment they will make. never do. The stakes are high and the emotional investment is deep. It’s one thing to feel the frustration of a guaranteed two-day delivery time, but the fallout from a mistake in the real estate transaction can be devastating and irreparable.
Historically, consumers wishing to transact in residential real estate have been forced to embark on a confusing odyssey, navigating an industry full of disparate and disconnected product and service providers. In this antiquated customer journey, the burden of building a cohort of siled entities that will need to walk in sync to close is daunting (e.g. mortgage lender, real estate agent, title agent, HOI, home inspector, etc.) . Much can and has been said about the added value of an experienced real estate agent, as well as the relief that technology and digitization will bring to these hurdles. However, one approach to modernizing the customer journey that has gained momentum and deserves more attention in the broader residential real estate space is the affiliate ecosystem model.
Rather than viewing customer experience as a series of stand-alone, product-specific, inelegantly bundled mini-customer journeys, vendors in the affiliate ecosystem model view customer experience holistically as a single journey with integrated and integrated products and services strategically provided by in-host affiliated entities at the right time. The closer and easier coordination between all stakeholders in the affiliate ecosystem model enables strategy, service, and pricing efficiencies that are very powerful and very difficult to replicate.
For existing industry participants and new entrants who buy into the Affiliate Ecosystem model, the relevant questions are (1) which adjacent verticals should be prioritized, and (2) how to set up those adjacent verticals responsibly, but scalable, without distracting attention from commodity growth; or in other words – build, buy or associate?
Why give priority to the title and the closing vertical?
While there are plenty of worthy commercial competitors vying for priority, the most underrated option, which also happens to be the unsung hero of customer experience, is most definitely the title and the escrow. Owning an affiliated title agency allows existing industry participants to own the pinnacle of the home buying experience – the closing ceremony. For those who are serious about giving their customers a personalized and consistent end-to-end experience, title and vertical escrow deserve a lot of attention.
While the title industry has remained somewhat opaque, if not completely unknown to consumers, most real estate and mortgage professionals would agree that title agents are the grease that keeps the machine running smoothly.
Quietly and behind the scenes, title pros work hard to quarterback, coordinate and execute, until their process culminates in the issuance of a critically important insurance product and holding a potentially very impactful closing ceremony. Title agents rarely get the praise they deserve from buyers and sellers themselves when everything goes according to plan.
But by the same token, consumers rarely blame title agents for any transactional friction (even if the title is at fault). When there are undesirable results, consumers generally hold their loan officer/lender or real estate agent/broker accountable. Keeping in mind the shift from literal word-of-mouth customer acquisition to a more online reality focused on review metrics (i.e. NPS), it becomes even more important to existing industry participants to own as much customer experience as possible for the risk of negative customer feedback and ratings. Many choose to control their own destiny rather than outsource important consumer touchpoints to third parties.
Build, Buy or Partner? There’s an exciting new option
So why aren’t more existing participants in the industry owning an affiliate title agency? Ultimately, setting up a title agency is tedious and running a title agency is difficult. Until very recently, the entry points available were limited to a de novo construction, acquisition or joint venture route. The respective pros and cons of each of these three legacy options is another article for another day. However, the broader trend of building affiliate ecosystems has generated new innovations within the title and trusted third party community to address the drawbacks associated with legacy entry points.
One such solution, which only recently came out of stealth mode, is a hybrid SaaS product called eAgency. The eAgency program combines proprietary technology with back-office fulfillment services to provide existing industry participants with an alternative “partner” model entry point. Its goal is simple: to make starting, owning and operating an affiliate title agency easy, accessible and simple. eAgency has been successfully piloted and tested with several major national mortgage lenders, proptechs and institutional buyers starting in late 2019. Three years and hundreds of thousands of closings later, eAgency has become a viable option for those looking a joint venture as a solution, but wanting to own 100% of their affiliate title entity.
For more information about eAgency, visit www.goeagency.com to learn more about the smartest way to own and operate an affiliated title agency.