Thursday, May 14, 2009

Setting Expectations (Part 1 of 5)

Last Saturday I published this post called “Title Company Fail.” In it, I outlined what I thought were 5 steps to help get title industry service levels where they should be. In this post, I will address the first.

1. Set better expectations up front

Last night I had the pleasure of spending some time with some folks in the crowd. In particular, Jim Duncan (@JimDuncan) and Matt Case (@MattCase) were discussing pictures that accompany listings. Being a non-agent, I always assumed you put up the very best pictures you could find. You made that front lawn look huge. Made the living room spacious and spotless, and hid the ugly wood paneling in the guest bedroom.

I couldn't have been more wrong.

It seems so obvious to me now. If you do that – post only pictures in the most favorable light – what happens when buyers show up? “Huh, that lawn doesn’t look as big as I recall from the picture.” “Spacious living room? This is a little den!” “How many fake trees were killed to panel that wall?” The buyers instant reaction is negative.

Compare and contrast.

The pictures are a true representation of the property. Maybe even a little on the flat side. Because it’s priced right (you are, of course a GREAT listing agent), the buyers still want to see it. Now what happens? The first physical reaction to the property is a positive one. Same property, same price, better results.

How does this apply on the title side?

Here are but a few things title companies could do to set better expectations up front:

1. Provide a quote for all the services (title, closing, title insurance, recording, transfer tax, etc.) up front.
2. Explain the different between standard ALTA policies and Enhanced Coverage.
3. Tell all parties that the short sale will NOT close in 2 weeks.
4. Tell all parties that the REO will NOT close in 2 weeks.
5. Send out a title commitment to the agent/buyer in advance, showing the exceptions to title.
6. Explain to the seller from the beginning why their current mortgage information is so critically important.
7. Tell everyone up front what you require for funding (Wire? Certified check?)
8. Explain up front that a HUD is not final/complete until the title company gets instructions from the lender as well as their approval.

There are likely many more, but even if every title company adopted a handful of these, we’d probably see a little more positive feedback.

The next post on this subject, scheduled for later this week will be on over-communicating.