The past few years have turned most industries on their head, and the title industry is no exception. So if you’re thinking about buying a home soon, you’ll find that your expectations of title insurance companies may be different from what you get since they’ve had to pivot quite a bit lately. Yes, the title industry this year is basically Ross pushing his couch up the stairs screaming “Pivot!” to his friends. But hey, that’s actually a good thing! In fact, many of the title industry trends you’ll see are positive for home buyers. Take a look at some of the most notable trends to expect from title professionals this year.
More Reliance on Technology
For years, the title industry was not known for taking advantage of the latest technology, despite title professionals often pushing for more tech-savvy solutions. But if there’s one thing 2020 has taught us, it’s that most tasks can be completed digitally in some way—especially when there’s no other choice!
And that’s great news for home buyers, as technology tends to speed up the closing process. After all, at a time when home buyers can begin the home purchase process online, they’re often disappointed to find that certain parts of the real estate transaction still aren’t digital. When you use technology to find your real estate agent through LemonBrew, and you continue to rely on technology to research homes you like, it just makes sense to use it for at least some of the closing process, too.
One example of how the title industry is using technology more this year involves remote online notarization, or RON. So what is this? To understand this concept, you should keep in mind that you’re required to sign closing papers in front of a notary public. Notarizing documents in this way can reduce real estate fraud, as it ensures that you are who you say you are and you’re voluntarily signing the papers to close on a home.
So there’s clearly a good reason for notarizing the documents. But that doesn’t necessarily mean this process has to happen in person. In fact, in the last decade, some state governments started allowing home buyers and real estate professionals to use remote electronic notarization during closing. But very few states actually used this digital option—until 2020.
Due to Covid-19, more states than ever began using RON so they could complete real estate transactions digitally when possible. Even the states that didn’t normally allow online notarization decided to temporarily allow it this year. And many title and real estate professionals are hopeful that this trend will stick around long term now that it’s clear that the title industry can benefit from this type of technology!
New Regulations from State Governments
Some changes in the title industry have come about as a result of new rules from state governments. For example, New York recently upheld a law that bans title insurance companies from wooing potential clients with dinner or entertainment. Regulations like this have put title companies on more of an even playing field, instead of continuing to favor only the big businesses that can afford to wine and dine clients. Now smaller startups—including virtual title companies that never meet clients in-person—aren’t at as much of a disadvantage compared to bigger title companies.
And as mentioned above, more states than ever now allow remote online notarization. This change will further improve the title industry by pushing for more reliance on technology—which will streamline the closing process by making it faster and easier on home buyers and real estate professionals alike!
Higher Title Insurance Premiums
Another change to the title insurance industry is the emergence of higher insurance premiums. In fact, the American Land Title Association’s Market Share Analysis found that the average title insurance premium has gone up by 8% compared to last year. Not only that, but the volume of premiums sold has also increased.
The increase in title insurance volume and premiums is due to more people either refinancing or buying homes in 2020 and beyond. After all, mortgage loan interest rates in the United States are at record lows this year, as they’ve dipped below 3%! This has pushed a lot of people to buy, since buyers realize the lower interest rates lead to affordable monthly payments—even at a time when home prices have slightly increased.
And of course, many people who already own a home have opted to refinance their mortgage loan this year to take advantage of the low interest rates. This title industry trend is expected to last the rest of 2020 and possibly well into 2021, so now may be a good time to buy or refinance with a lender if you want a lower rate!
More Emphasis on Communication and Customer Service
This has been an interesting year for title companies. In years past, buyers didn’t put much thought into the company that would be completing their title search. Many weren’t even aware they could choose the title company they wanted to work with! But a lot of that has changed as title insurance companies have been pushed to the forefront more than ever.
After all, in recent years, home buyers have discovered that they do have a choice in title companies, so there’s motivation for title professionals to find ways to distinguish their offerings from others. And with the pandemic, they’ve had a chance to get creative while showcasing their customer service skills in order to help home buyers feel comfortable during closing any time they had to meet in person to sign papers.
For example, some top title companies went out of their way to ensure the closing could accommodate social distancing and a touch-free process by putting up plexiglass and wearing gloves when handling paperwork. They also sanitized furniture, pens, and anything else buyers had to touch during closing. And of course, they wore masks and provided hand sanitizer during meetings.
This year, some title professionals have even accommodated buyer requests for outdoor transactions, allowing buyers to sign paperwork in their car so they didn’t have to enter the office. And in order to show that the title industry is about more than the title product—as it’s also about customer service—many title professionals still gave out branded gifts at closing. They just made sure they were safe to give out at this time, such as pre-packaged snacks and gifts that buyers would appreciate when moving into their house during a pandemic!
And of course, the sudden decrease of in-person meetings for the home buying process has made other forms of communication more important than ever. Title professionals have been emailing, texting, or calling home buyers in lieu of meeting in-person in order to exchange information while completing the title search, preparing paperwork, and setting up closing day. This allows buyers to stay in close contact with them without risking their health during a pandemic.
If you’re interested in finding out for yourself what these title industry trends mean for home buyers, why not start the process of purchasing your dream home? At LemonBrew, we can match you with a Partner Agent and then walk you through important processes, from finding a home loan to getting title insurance. Contact us today to get started!
