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Affordable Title and Escrow You Can Scale to Future Proof Your Lending

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By Moshe Abudarham

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“Typically, a customer has to prioritize two out of three factors: cost, quality of delivery and speed,” says Jay Promisco, Chief Production Officer at Sierra Pacific. “States Title is highly competitive on price across the country, and in Minnesota, its settlement services cost half as much.”

Jay’s not wrong – due to greater efficiencies across the system, we can offer lower title and escrow fees than most other title companies – generally our fees are up to 35 percent lower averaged across all states. We can also structure our fees depending on a customer’s requirements, and in non-promulgated states, we quote the lowest title fees. What’s more, our fees are all-inclusive, meaning that itemized services such as courier costs and delivery fees are rolled into a flat fee for a given house pricing band in a given state.

Of course, just like other title providers, our fees do not include charges required by law, such as city, county, and state recording charges and taxes (which are specific to the location of the home), attorney costs, third party service fees, or lender’s fees and closing costs.

When Jay first introduced States Title to his team, emphasising the affordability of choosing us over other title providers they had used previously, the response was one of disbelief – “surely cheaper and faster means useless!” – and it seems much of the industry has got used to only getting two of three factors. But soon, loan servicers at Sierra Pacific saw that States Title has completed the venn diagram of cheaper, faster, and of equal or better quality:

And according to global management consultants, McKinsey & Company, companies that make significant improvements in operational performance can increase the win rate of offers by 20 to 40 percent (while also lowering churn by 10 to 15 percent and costs to serve by up to half). In other words, for every 10 quotes that result in a homebuyer or owner moving forward with a lender, between two and four more will also move forward.

“Whatever the States Title team is doing to ensure quality delivery, it’s working – I have had exactly zero customer issues,” says Jay. “And, because States Title massively reduces manual input, closing takes us 75 percent less time from start to finish.”

Increased wallet share, better ROI

It almost goes without saying that when a lender processes hundreds or even thousands of quotes and files a month, the benefits multiply. And so can the problems, which is why States Title runs a pilot for every new customer, to start small, realize process efficiencies specific to that lender, and to iron out any kinks before they scale.

In the same McKinsey & Company report mentioned above, the global management consultancy found that making improvements to the select and buy phase of the buyer’s journey yields a 5-10 percent increase in wallet share. This applies to us, in that we definitely benefit from our bespoke approach and arranging intensive pilots for each lender customer, and it also applies to our lender customers and their homebuyer and owner customers.

According to the McKinsey report, one large bank eliminated 15 process steps to enable account opening anytime and anywhere: The effort boosted self-service sales from zero to more than 33 percent of total sales with 50 percent higher conversion rates, and reduced cycle time to 10 minutes compared with 2-6 days previously. These changes decreased cost to serve by 40 percent and tripled the retention rate of relocating customers.

There is also a great opportunity for banks and lenders with other products and services – such as current and savings accounts, credit cards, or other loans, including home equity loans and HELOCs – to cross sell to satisfied customers. It can even work the other way, where a current account customer, for example, goes to their bank for a mortgage or to refinance. With minimal extra investment, a lender can increase the ROI from a particular customer.

Future proof and ready to scale

The equation is simple – more customers, using more financial products and services, provides more revenue overall. But what’s at stake is more than that: it’s future proofing your business so you don’t lag behind the competition.

Jay understands that the changes Sierra Pacific has made, including using States Title as a preferred title and escrow provider, have not only improved processing times and costs on one, or even hundreds of files. They have improved the lender’s value proposition, put them in a position to scale, and in doing so, given Sierra Pacific the greatest advantage: a business that is ready for the future.

As Jay explains:

“Our value proposition is now a combination of lower rate fees, great service and accurate work, and industry-leading turnaround times. We don’t have to compromise, and neither do our customers. States Title gives us a competitive advantage on every transaction, with every returning customer and in the industry at-large. This is the Amazon effect we were looking for and we are excited to roll out predictive underwriting for wider adoption.”