The “R” word is one of the most feared words in the marketplace today: RECESSION. There’s a lot of debate around whether the United States is in recession, but whether you call it a recession, slowdown, correction, or a normalization, it’s clear the market is changing.
As a title professional, now may be a good time to consider taking action, particularly if you’re already seeing some slowing in your market. New situations like this present new dangers and requirements, but they also present opportunities.
Let’s start with the dangers. The most obvious threats are reduced sales or revenues, which could threaten profitability and put pressure on cashflow. Those are troubling possibilities, but good management techniques can help you navigate these potential headwinds. Here are some steps to consider:
Keep a close eye on your business metrics
- Get accurate revenue numbers and watch them carefully.
- Seek realistic sales projections. Know what’s in your pipeline, and in your customers’ pipelines.
- Watch expenses closely.
- Know your “cash-burn” rate (i.e., how long you can operate at a loss).
Hope for the best, but make a plan for the worst
- No one likes layoffs, but you should have a plan. Make this as soft as possible. You may consider salary “freezes” and percentage salary reductions as an option should conditions warrant.
- Work with landlords, vendors, suppliers, and banks for more favorable terms.
- Build a “war chest” or “rainy day fund.” Having cash-at-hand is prudent.
- Consider a line of credit. Seasonal slowdowns, roughly October through February, may make cash flow challenging. One alternative may be to obtain a reasonable line of credit from a trusted, local lender that can be used for short term coverage of payroll or extraordinary expenses “just in case” it is needed. The line of credit option creates flexibility for expense management.
Having discussed the dangers, here are some new responsibilities you may face in a contracting economy:
Get your game face on
- Things are a lot more competitive. There is more competition for each revenue dollar. Prepare your team to compete more effectively.
- Keep a close eye on your competitors. Know what they are doing and where they may be looking to take market share, your employees, etc.
- Take special care of your best customers. Know where your revenue is coming from. “Show the love” to customers who may be at risk.
- Find partners you can trust. Look for loyalty, financial strength, and assess the risk of being betrayed. Some underwriters may put increased pressure on you to make minimums, or they may cut staff or divert resources to support their direct and affiliate operations while neglecting your needs. Find the partners that are going to be highly responsive to your needs so you can get your difficult deals closed.
- Watch out for “bad moods.” Your team members may worry about slowing market conditions or even about being laid-off. Fear and stress can make it difficult to compete. Company culture is important. Stay close to your team and engage them. Get their input. Share your action plans.
- Make new commitments. Revise sales projections and requirements for the sales team. Now is the time to invest in your team’s selling skills and marketing efforts.
- Find efficiencies. It’s time to streamline processes and improve your systems. Seek ways to do more with less.
If you cope with the threats, fulfill your obligations, and have adequate financial capital, you may have the chance to take advantage of opportunities in a slowdown. Some of these opportunities include:
Improving the quality of your team
- Upskilling – consider education and training for your staff including CE, CLE, and sales training.
- One consideration is to hire top performers from competitors. Of course, you want to remain vigilant for competitors looking to “poach” your employees.
Become a bigger and better company
- Now may be the time to consider purchasing a competitor for a discount to expand into new markets and to obtain new capabilities.
- You may wish to rethink your customer experience and employee experience to give you a competitive edge.
- Streamlining management and operations can help you become a more agile company. This might include bringing in new technology to do more with less and to improve turn time and accountability.
- Consider making new offers – such as commercial transactions, education and training for your real estate agent customers, or new digital capabilities for customers such as mobile apps.
Regardless of whether the economy experiences a soft landing, hard landing, stagflation or a recession, anticipating what you might do in advance of these situations is essential to the success of title professionals. By planning ahead, you can overcome market challenges and adopt a new “R” word to describe your organization: RESILIENT. Of course, your Alliant National agency representative or agency manger is always available to discuss market conditions and ways to help your business thrive!
We’ve learned from the refinance boom and bust years that being a one trick pony in the title insurance profession is not the pathway to longevity. Diversifying your transactions with purchase, refinance, builder, REO and mobile home transactions is a good way to hedge your bets in the cyclical reality of the real estate market.
Commercial transactions can also be a great way to solidify your competitive position in the local market. However, many agents are a bit leery of taking the plunge due to the more complex nature of these deals.
Donna More, VP and Senior Underwriting Counsel for Alliant National Title Insurance Company, says that while she can understand an agent’s initial trepidation, there is a logical pathway for agents to move into the commercial end of the business, and Alliant National underwriting counsel can be a great resource as you are learning the ropes.
“I think an experienced underwriting attorney is key in these transactions,” More says. “We know right off the top what is going to come up. We can get the agent prepared, alert them on what they are going to need, and tell them what questions to ask – even before they get the search report – so they can avoid some surprises later on in the transaction.”
She notes that agents are hesitant to get into commercial because they don’t want to appear ignorant when questions and issues come up. But most of the tough issues will be resolved by underwriting counsel.
“We are going to be the ones who come up with methods of resolution, based on our professional experience,” she explains. “That is one of the big advantages we offer our agents. With our experience and knowledge, we are often able to predict what is going to happen, or what is going to be needed. We can already be thinking ahead to the best way to resolve potential issues.”
But let’s not put the cart before the horse.
There are some key steps you can take before venturing into commercial transactions. It’s also helpful to understand how the players’ roles are different and explore some of the elements that are unique to commercial transactions.
Learning about commercial transactions
The best way to learn the nuances of commercial deals, according to More, is first, to take on small deals in order to learn by doing; second, to work closely with underwriting counsel to get questions answered; and finally, to seek out educational opportunities.
“I recommend that agents who want to get into commercial and want to feel competent and prepared should take classes,” she advises. “There are always good takeaways from the commercial real estate seminars. Also, ask local attorneys what they recommend would be helpful to gain a higher degree of sophistication in commercial real estate.”
More says it shouldn’t be too hard to find educational opportunities, since bar associations and land title associations offer commercial real estate classes. Even if the class is geared towards lawyers, it can still give an agent insight into commercial deals, affording them a greater level of comfort, she adds.
Alliant National agents can check out a free webinar, Commercial Closings? No Problem! at alliantnationalacademy.com.
Securing commercial transaction title orders
More acknowledges that the most complicated commercial transactions are usually handled by attorney title agents but notes that there are plenty of non-attorney title agents who have been successful at developing a clientele with their existing real estate agent and broker customers who handle both residential and commercial transactions.
She also advises mining existing customer relationships for potential opportunities.
“Someone who bought a $3 million home and closed with you is probably a fairly successful businessperson and may be involved in buying and selling commercial properties,” she says. “Nurture those relationships.”
She also suggests getting immersed in the local business community and commercial industry organizations, especially the real estate associations like Commercial Real Estate Women (CREW) or NAIOP, the Commercial Real Estate Development Association (fka the National Association for Industrial and Office Parks).
“Being involved in the local commercial industry organizations is a very good source of knowledge and business,” More says. “Go to the local meetings and take advantage of the educational opportunities to build your confidence.”
How commercial title work differs from residential
Commercial transactions can be complicated, with more lawyers involved and often more parties to the transaction. In addition, the principals are often not individuals, but legal entities.
“The title agent needs to be very familiar with the types of legal entities in their state and what the requirements are for proof of good standing and proof of authority,” More explains.
She says an agent is also more likely to have to deal with ancillary issues, such as easements for access. Generally speaking, in a residential sale, the home is on a platted lot and there are no issues with access. But with commercial property, it could involve a landlocked parcel and you have to be concerned about access or the adequacy of access.
“The other important difference is how you deal with the lenders,” she says. “The lenders are going to expect more. In the more sophisticated transactions, there are going to be more requirements and different documentation needed. Even though you as the title agent would not be preparing the documents, you will have to familiarize yourself with all the documents in the transaction as well as get them signed as part of the package and recorded.”
More notes that construction loans are also more complicated for commercial properties and lenders will have a lot more requirements. The agent could also run into construction lien issues.
“Florida has a construction lien law that is very detailed and very complicated. That’s another reason why it’s so important to go to your underwriting attorney to get the guidance you need,” she advises.
Same basics, different pacing
The basics of the title and closing work in a commercial transaction is not very different from residential transaction.
“The agent needs to go through the commitment, see what the requirements are, and get familiar with the exceptions,” she explains. “It is especially important for a title agent to be able to distinguish what the parties are responsible for vs. what they are responsible for. And of course, they should come to underwriting as soon as they see something that makes them say, ‘I don’t know what this is.’”
However, More clarifies, the title agent must account for everything even if it is the sellers’ or buyers’ responsibility to actually perform the task or provide the documentation.
Sometimes commercial deals can be turned around quickly, but usually they take longer because the inspections and due diligence are more complicated, often involving permitting, approvals, DOT issues and access.
“In my seminars for Florida agents, I have always suggested checklists for any transaction, but it is most imperative in commercial deals,” More says. “Go through the contract. Check the timelines. Also, as the title agent, you need to share your title work with all parties – seller, buyer and lender. Sellers and their lawyers will have a much bigger role in a commercial transaction. The seller will have to come up with all kinds of documentation. On the buyer side, the lender will need to see the organization of the entity and will want to look at their books and balance sheets.”
And of course, the title agent will be involved in the curative work, even if it is only to give the seller guidance as to what will be required.
“In addition to keeping up with the timing, probably the most crucial part of what they do is keeping track of what needs to be fixed and how it needs to be fixed,” More notes. “That’s where we come in. They need underwriting to determine how to cure a problem or explore the alternatives available to fix an issue. We rate those alternatives – this is the best course of action or this is the option we don’t want to do.”
Commercial real estate transactions do require some expertise, but it is knowledge that can be acquired over time through educational opportunities and on-the-job experience with smaller transactions. But the most important resource you have at your disposal will always be the experienced and knowledgeable underwriting attorneys at Alliant National. We are always here to help you learn how to navigate this fascinating and challenging aspect of the title insurance business in order to take your agency to the next level.
Do you have a content marketing plan in place?
Modern business runs on content. Without it, you’ve got no publicity for your products or services. And without publicity, you’ve got no sales. To avoid shooting yourself in the proverbial foot, business leaders must prioritize having a content strategy in place, including an acute understanding of how, when and where the content will be produced. Here’s how to get started.
First off, what do we mean when we say content? Well, content is merely a shorthand for any piece of media that helps promote your business or position your brand. It can have many uses, from intangibles like raising awareness to concrete actions like driving conversions. Your content can take on many forms – including blogs, social media posts, infographics, eBooks, videos, search engine ads and much, much more.
Establish your business objectives
You should never create content haphazardly or just for the sake of it. Instead, connect it to clear, specific and concrete business objectives. Anything less is just a waste of time and money, and let’s be honest, no small business owner has an excess of either!
Think strategically about channels and audience
Once you have your business objectives fleshed out, you need to think about your audience and channels. Ask yourself how your target audience gets the information it needs? Where do they spend their time? The days of customers coming to you are long gone. You must bring your content to them.
Next, determine what type of content you are going to create. Remember, not every asset will work well with every channel! For instance, putting together and sharing a long-form, all-text post is not a good idea on Facebook, which favors smaller amounts of text paired with engaging media assets like photos and especially videos. Similarly, it can be tempting to jam your corporate newsletter with everything and anything your firm is doing, but resist that temptation. Focus instead on who the actual audience is and tailor your messaging accordingly. If you operate B2C, your newsletter should focus on customer tips, educational resources and content that drives an emotional response. Conversely, if you do B2B marketing, you should feature items like industry news, technical information about your products and services and content that drives a logical response.
Gather your resources
Now for the fun part: It’s time to write. Of course, this can pose significant logistical challenges. You must ask yourself the question of whether you have the external expertise already in house or if you need to obtain outside support.
Remember, it’s not enough to have someone who can write but can’t wrap their mind around your company or industry. Similarly, having the best subject matter expert in the world won’t help you much if they can’t put pen to paper and express themselves clearly. You need both, and luckily there are a lot of options for businesses to explore. We live in a world of flexible work and side hustles; there are a ton of highly skilled freelance writers out there if you know where to look.
Here are a few things to consider if you choose to look outside your firm for writing support:
1. Go to where the talent is: Seek out sites dedicated to freelance work, such as Upwork and Freelance Writing.
2. Do your due diligence by looking at their portfolio: A good and experienced writer will have samples of their work readily available for interested prospects.
3. Look for past experience that overlaps with your business: Keep in mind that it doesn’t need to be an identical match; but something in the same ballpark will help the writer get up to speed faster.
4. Ask for referrals or ask them to produce a paid test piece: It is perfectly appropriate to want to look before you leap. But remember, time is money, and if you want a writer to do a trial run, it needs to be paid.
Never discount the power and value of effective content in helping promote your business and increase your revenues. Remember the adage: “If a tree falls in the forest and nobody is around, does it still make a sound?” Well, the same holds true for your company. You can have a fantastic business model and an unbeatable team in place, but if nobody knows about it, it’s like it doesn’t exist. Adhering to these best practices can help you build out an effective content strategy and start producing assets to build better customer relationships and drive more sales.
Want to take things further? Learn about building a content calendar to further enhance your marketing strategy!
Going without IT support is a bad idea, but which approach should you choose?
Having a consistent, powerful and reliable digital presence is a must for any business. Without it, you will be hard-pressed to convert new customers or maintain a competitive edge. Of course, this presents interesting challenges, especially for small businesses, as you’ll need to decide on the best approach for your IT: make an in-house, full-time hire or outsource your needs to a contractor.
Why is IT support necessary?
It can be tempting to skimp on IT resources. After all, for many firms, budgets are tight. And really, if you are small enough where you only have a few devices and employees, it seems logical to ask if there is a need for such a significant investment.
The answer is simple: absolutely. Even small businesses have significant IT needs. Cybersecurity concerns alone merit seeking IT support. For industries like title insurance, the need for IT help has additional urgency, as agents and underwriters routinely deal with large quantities of sensitive information.
Having an IT expert pays off in other ways as well. From staying up to date on the latest trends and keeping your systems properly updated, there is no doubt that dedicated technology professionals can bring exceptional value to any title agency.
Contractor vs. employee
Let’s discuss some of the big differences between a contractor and an employee. While pay and taxes are critical ways in which they diverge, perhaps even more substantial is the issue of autonomy. Employees are hired with the understanding that the work they perform will be done per the direction of the company. Contractors on the other hand typically have far more control over when, where and how the work gets completed.
To hire or to contract, that is the question!
So, should you hire an IT expert or simply contract with a firm or individual? Ultimately, it depends on your agency’s needs. Contracting with a professional can carry significant financial benefits, helping you save money on everything from health insurance to vacation time, but other questions are equally important to consider:
- How urgent are your IT needs?
- Making a full-time hire often takes considerably more time than contracting a professional. Can your projects wait, or do you need to move immediately? Keep in mind that the “Great Resignation” has squeezed labor markets like never before, and the IT field is not immune from these trends.
- Do you need continuous support or project-based assistance?
- Do your systems and operations require continuous IT support, or does it make sense to hire on an “as-needed” basis as projects pop up? Quite often, businesses have one-off projects that require highly specialized skillsets, such as cloud migration or data engineering. In those cases, it may not make sense to hire someone full-time.
- Can you absorb the losses if you make a bad IT hire?
- Some estimates put the cost of making a bad hire as high as 30% of that employee’s full-time salary,[i] which for an IT generalist could easily eclipse $10,000. Hiring a contractor lowers those stakes considerably, as they are understood to be temporary workers.
- What are your concerns about regulation and liability?
- With title insurance being a heavily regulated industry, you must consider regulation and liability concerns when bringing in technology contractors, and also think about how long it will take a contractor to get up to speed.
No two businesses are the same
Just like any other aspect of a business, no two companies are the same when it comes to IT. What is straightforward for one firm might be more complicated for another. What’s universal, however, is the need for high-quality technology professionals, which can help agencies become more innovative, efficient and profitable. By approaching the decision strategically and weighing all considerations equally, agents can find a solution that works for them.
Find out more about hiring an IT contractor here.
 The Cost Of A Bad Hire And Red Flags to Avoid (2022) (apollotechnical.com)
Cloud computing can increase your firm’s scalability, flexibility and productivity.
Unless you’ve been living under a rock, chances are you’ve heard quite a bit about the cloud over the past decade and a half. Anyone with a smartphone has at least a basic understanding of this type of computing. Yet the cloud is far more than a convenient place to hold photos, videos, documents or other data for individual use. Cloud computing has, in fact, become an integral component of how today’s businesses operate. It offers firms unprecedented ability to scale their operations, off-load cumbersome maintenance, improve productivity and even cut costs. Let’s look deeper at the advantages it offers to small and large businesses alike.
The most obvious advantage of cloud computing is expanded flexibility, which can mean a couple of things. First, our economy is experiencing tremendous upheaval, with the Great Resignation and the ongoing push for hybrid work shaking old paradigms to their core. Cloud computing represents an incredible opportunity for businesses to free their workers from being tethered exclusively to on-site technologies, giving them access to the tools, documents and systems they need from anywhere at any time.
The second way cloud computing improves flexibility is by supporting customization. It’s highly likely that your business’s IT needs will grow and change over time. By migrating systems to the cloud, adding new seats, deploying new functionality and carrying out updates becomes much easier.
Businesses must always be mindful of their costs, which is another advantage cloud computing brings to the table. The cloud can reduce IT spending in several ways. First, when you migrate to the cloud, you can say goodbye to dealing with expensive hardware, which the cloud vendor owns and manages off-site. Lower maintenance comes along with cloud adoption as well, with responsibilities also transferred to the vendor and allowing you to reduce your internal IT budget. Don’t discount productivity gains either. With cloud computing, companies can easily update their systems. Staff then will have more time to focus on creative work.
Closely connected to the issue of worker flexibility are recruitment and retention. Cloud computing is a key enabler of the hybrid worker revolution, as it supports communications and collaboration solutions like UCaaS, CPaaS, CCaaS, DaaS and more. With the demand for hybrid or fully remote work on the rise, having the infrastructure to support these workers is a fantastic advantage when trying to attract the best talent.
Be Mindful of Security
If you choose to adopt cloud computing for your agency, always remember to inquire about the vendor’s security and data protections. In a heavily regulated industry that deals every day with sensitive information, agencies must be mindful of the security of their technology systems. The good news is most cloud computing vendors will offer products and services that already feature robust safeguards like DDoS protection, data integrity and 24/7 support. However, there is a great deal of variation between providers, and it is always a good idea to inquire directly about your security needs to ensure you have adequate protections in place.
Each year that goes by seems to validate the increasing adoption of cloud computing. With cloud computing often leading to additional flexibility, higher productivity and cost savings to boot, it’s no wonder more businesses are seeing it as a powerful method to gain new efficiencies and spur exciting growth.
Do you want to learn more about cloud computing and how it can help your business? Check out this great article. And if you’d like to discover top companies that provide cloud services, this piece details some of the top companies in the field.