It is well know what the economy and the severe downward trend of the housing market has done to the real estate industry. According to real estate market reports U.S. homes have lost about $2.7 trillion in value since January, 2009. Many top US corporations reported losses in 2007 and 2008 after very profitable years.
According to industry experts:
Current market conditions are not likely to change in the near future
Mortgage rates will start to increase next year
The mortgage market forecast next year of only about $ 1.1 trillion casts a shadow on 2012
Cause and Effect
The effects of the current economic downturn has spurred American companies to not only cut expenses on a broad scale but freeze hiring. The title industry had drastically reduced headcount and asks its remaining staff to handle files which require months to close instead of weeks. Who was likely the first to go when cuts were made? Usually sales and marketing was at the head of the line. Paying salaries and commissions to these people in a declining or flat market is hard for some to justify.To increase revenues and market share it is vital to increase sales and marketing activity. While effective marketing can be achieved digitally through email and web and social marketing content, it is important not to lose sight of what an effective sales team does for an organization. A highly motivated and well-managed sales force can mean the difference between modest revenue (market share) growth and significant gains. The right sales solution can provide an immediate impact to organic growth without significantly increasing expenses.
What can be accomplished?
The 2012 Real Estate Market
In the last 50 years there may not have existed a better time for a company to increase market share. Throughout the US, title agents have gone out of business. Those who are still in business have drastically reduced their staff, usually beginning with sales and they have cut their marketing and customer service budgets to survive. In doing so, those companies have given others with the foresight to begin preparing for the future today a distinct advantage in the pursuit of market share.
Realtors and lenders are looking for a title partner with whom they can align themselves and aren’t necessarily loyal to their current title relationship. The successful title agent of the (near) future will need to know the power of partnering with its customers to provide true value-add services designed to assist the real estate professionals in becoming more successful—not solely through better “apps and widgets” but with targeted marketing platforms that directly generate business.
Refi’s, REO’s and Short Sales
Many in the title industry have recently made the choice to go after the “quick fix” customer, i.e. lenders and banks. There is no question the recent refinance and foreclosure markets have propped up the industry but rising interest rates and economic stability will soon have their effect. The long term success of the title agent will be found in the purchase market (real estate agents).
According to Dennis Gilmore, CEO of First American Financial:
“… a refinance market is not a market we should build a business around; it’s transient, it moves in and out, it can hit us in a month, be gone the next month. We need to be efficient with it, but it’s not what you want to build a franchise around.” (Author’s note: the same is true of REO and short sales.)
THE SOLUTION
If you have been, don’t ignore your sales and marketing any longer. The real estate and (most likely) labor markets have clearly bottomed, barring any unforeseen economic events, and is slowly improving. If you want to increase your order count, you and your company must have a constant presence in the local real estate community. If you are lender driven you should know the particular needs of the mortgage originators that work for them as they too eventually transition from a refinance market.
Many title agents ask closers and processors to also engage in sales. While it is true they can play a role in representing your company, this role is usually best limited to customer service. If you are in need of first class representation to those who don’t currently send you business, it is vital (in my opinion it is critical) to hire full-time professional representation. A qualified sales professional is comfortable making cold calls, knows how to network, is a referral generating machine and has experience addressing groups of ten or more.
If you are an owner, partner, executive or a decision influencer in your company, and you’re not sure how to recruit, hire, compensate and manage a sales person or team, the good news is there is plenty of help available both in and outside the industry. It is more than worth the time to educate yourself as to what other title agencies in the U.S. are doing to increase their order counts and add more customers. And the time to start is now.