David Townsend, President and CEO of Agents National Title Insurance, joined Qualia’s VP of Customer Success, Brian Thome, for the second installment of Qualia’s Executive Perspectives webinar series. Townsend founded Agents National in 2005 with an “agents-first” philosophy and a mission to enable a more digital process for title agents. His team were the first underwriters to offer digital policy jackets and CPLs.
Townsend’s future-thinking ethos has served him well over the past 17 years since launching Agents National and he’s been able to weather multiple market cycles. Townsend offered his perspective on how the current market differs from the last major recession in 2008 and how agents can adopt different strategies and think ahead to prevail in today’s market downturn.
The 2008 recession to now—what’s different?
The conditions surrounding the Great Recession of 2008 are far different from today’s macro environment. In the decade leading up to the housing market crisis, home buyers were sometimes purchasing a home with zero money down on their mortgages. When the market crashed, the real estate community faced a tsunami of foreclosures.
Today, lenders face far greater oversight to prevent unqualified borrowers from purchasing homes. Additionally, employment levels are much higher now and the overall health of the borrower is much stronger than during the Great Recession when the entire economy was hurting. As a result, homeowners have more equity built up in their homes and a more stable source of income, leading to less potential for foreclosure.
Title, escrow, and mortgage lenders won’t have the same wave of foreclosure transactions like the 2008 recession to fall back on. However, the real estate community does have a healthier set of borrowers who may now be ready to purchase a home as market competition cools down amid ballooning interest rates.
Townsend noted that the market also looks different across various regions and markets. For example, in Florida, the housing market is still competitive and active. Meanwhile, in second home markets like the Lake of the Ozarks in Missouri, activity is softening.
Strategies to capture revenue amid lower transaction volume
Despite a tight market, Townsend believes there’s still plenty of opportunity for title companies to capture revenue. “It’s all about getting out in front of the customer,” he said. “There are a lot of things that we do that our customers have no idea that we do. It’s time to get out there and market everything we do.”
For example, Townsend pointed to the ALTA Leasehold Policy, which protects commercial tenants in case there’s a title issue that’s superior to their lease policy. “If there are two competing offices, [the tenant] might choose the one with the ALTA Leasehold Policy.”
In addition to enlightening clients about the diverse products title companies offer, Townsend encouraged title agents to get in front of real estate agents and walk them through what title agents do and the value of the product. “The biggest currency title agents have is their knowledge,” Townsend said. He noted that the advisor relationship creates a “stickiness” because the real estate agent becomes dependent on the title company for knowledge and advice. “That’s how you maintain customers and grow your business,” Townsend said.
Effectively leverage technology to stay lean
During a slower market, Townsend stressed the importance of investing in technology to work more efficiently so that when rates come back down, title agents are able to meet demand. “Work with your technology partners and invest in it,” he advised. “It’s not money out the door—it’s a force multiplier.”
Townsend noted that technology can also be a helpful stopgap when people retire or decide to change jobs. “You might not want to replace them [during a slower market], so you need to work more efficiently,” he said. He pointed to plant posting as an example of a function that title agencies might avoid replacing and instead turn to outsourced vendors.
Today, thanks to powerful technology like APIs, title agents can more effectively work with outsourced partners. “If the agents have a good software system, [the workflow] doesn’t end at their walls,” Townsend said, adding that with APIs, title agents are seamlessly integrated with outsourced vendors who can help them expedite their processes.
Now is when title agencies build their future
After two years of record-breaking activity that practically fell into title agents’ laps, Townsend believes now is when agents will either succeed or fail. “Right now is when you build your future…you’ve got to really work for it,” he said. Townsend encouraged title agents to get involved and capture as much information as possible to make effective marketing and technology decisions.
Interested in hearing more executive perspectives on current market trends? Register below for Qualia’s Executive Perspectives webinar series and watch the last event.