Real Estate Settlement Services Industry Needs Technology-Driven Efficiencies
The real estate settlement services industry is not well-positioned to weather a recession, according Patrick Stone, executive chairman and founder of the Williston Financial Group, a company that operates several businesses in the title insurance and real estate settlement industry.
That’s a critical oversight because Stone firmly believes a recession is coming.
“Personally, I don’t think it is an if, the real question is when,” he said. “WFG assumes we will have a recession commencing somewhere between Q3 2019 and Q4 2020.”
Stone believe that recession will have a substantial impact on the settlement services industry.
“The impact on WFG, and the settlement services industry in general, will be a shrinking market with fewer available transactions and clients more focused on two basic concerns: cost and the quality of service,” he said, noting that. “However, the recession will accelerate the consolidation trend that has already started in the settlement industry.”
Using Real Estate Technology-Driven Initiatives to Increase Efficiencies
To prepare for that consolidation trend, WFG is actively implementing three specific technology-driven initiatives to increase efficiencies in its business, according to Stone.
“WFG has accelerated its efforts to finish migration to a single operating platform, consolidation of its title production capabilities and implementation of its integration platform (WESTVM) with as many lenders as possible,” he said. “Finishing these three initiatives will allow for WFG to consolidate order entry and post-closing functions, maximize production efficiencies and eliminate as much rekeying of data as possible.”
But Stone doesn’t see evidence that others in the industry are as aggressively recession-proofing their businesses.
“For the most part, it doesn’t appear that most of the industry has done much in preparation for the downturn, as most of the recent focus has been on compliance and keeping abreast of advancements in eClosing and remote notary,” he said.
Stone noted that while a recession will have strong impact on the settlement services industry, he does not believe the larger real estate market will not be as negatively impacted as it was during the last recession.
“Unlike the last downturn, real estate won’t be the cause or take the blame, and the impact on real estate will be much less severe,” he said. “Most markets will not see a downturn in prices but will witness a noticeable drop in volume.”
This article is seventh in a series spotlighting how different real estate industry leaders leverage property data and technology to hedge against housing market volatility. Below are the first four parts of the series.
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