Closing.com — a Web site that allows title insurers and other settlement service providers to market their services to real estate professionals and also directly to consumers — has entered into a partnership with the American Land Title Association.
Under the partnership, ALTA members will be able to sign up for premium listings at Closing.com at no cost for 15 months. Premium lisitngs will allow title insurance companies to provide rate quotes through Closing.com once the site adds that capability next month.
Currently in beta testing, Closing.com currently has basic listings for about 230,000 companies who provide title insurance and other settlement services, said company founder and CEO Anthony Farwell. Basic listings, which are free to any settlement services provider, allow companies to put their contact information in Closing.com’s searchable database.
Companies that want to provide rate quotes need premium listings, which will also place them at the top of search results when real estate professionals and consumers search basic listings for companies offering services in their area.
Closing.com will roll out a rate search engine for title insurance policies in mid-November, Farwell said, with other categories of settlement services like home inspections to follow.
Farwell said the site, which launched in August, already has "hundreds" of premium listings, and added about 100 title companies the day the partnership with ALTA was announced last week.
"We’re getting sufficiently inundated that after a month or so, we may call off the free (premium) listing," Farwell said.
No payments are involved in the partnership, although Closing.com parent company ClosingCorp Inc. is one of a number of companies that buy advertising, exhibiting and sponsorship opportunities from ALTA through the group’s Partnership Program.
Michelle L. Korsmo, ALTA’s senior vice president for marketing and member programs, said Closing.com provides an outlet for the group’s 3,200 agency members to "talk about the value of the product we provide."
Whether it’s the work that goes into the title search process or the insurance provided, she said, "It helps to be as transparent as possible in a way that (still) protects your business model."
Closing.com plans to roll out a title insurance rate search engine in mid November that will return results based on property location. Rate searches for other settlement services, such as home inspections, will follow, Farwell said.
With the Department of Housing and Urban Development and other regulators pushing for more transparency in the provision of settlement services to consumers, the industry is moving toward using the Internet "to empower consumers to shop and buy direct, or work with their professional to better understand the services they are buying," Farwell said.
But ClosingCorp has warned that HUD’s proposed changes to the Real Estate Settlement Procedures Act (RESPA) could actually discourage consumers from shopping for settlement services on their own. While HUD proposes tight tolerances on fees charged for settlement services provided by a lender or a company recommended by the lender, services selected by consumers would not be subject to the same constraints.
HUD’s proposed rule might inadvertently end up "frightening consumers into selecting the lender’s recommended providers as the only way to control costs," ClosingCorp. said in its comments to HUD (see story).
When it comes to settlement services like title insurance, real estate professionals and consumers are not looking solely for the lowest price — they also want to know more about the level of service provided, Farwell said.
"What we are really trying to be is not just a price comparison (site), although clearly we will offer that," Farwell said. "But people want to know more about who is providing these important services. They are not going to be too cavalier" about their selection.
When shopping for auto and life insurance, "people don’t tend to pick the lowest-priced provider, but the reasonably priced, trusted provider," Farwell said. He expects that some companies will use Closing.com to compete for business by offering "good service" for a "very good price," while others will charge a premium for a higher level of service.
In order to help consumers select settlement services based on both price and level of service, Closing.com will not only provide in-depth information from the companies themselves, but ratings and recommendations from real estate professionals, vendors and consumers. Settlement services providers will also have the ability to respond to comments.
"That could be a source of trepidation" for many companies, Farwell said. But in the age of Web 2.0, "everyone now expects the ability to get user input on the selection of a product or service."
La Jolla, Calif.-based ClosingCorp. is already offering a site that provides title insurance rate quotes in California, TitleWizard.com, which it developed in conjunction with the California Land Title Association.
When the site launched, California Insurance Commissioner Steve Poizner said it would help consumers shop for the best deal on title insurance (see story) and the state discontinued its own public rate survey. Insurance commissioners and title associations in other states have expressed interest in expanding the site’s scope, and ClosingCorp. will not be pulling the plug on TitleWizard anytime soon.
Farwell said some states have adopted rules requiring that title insurance rates be available online, and TitleWizard could be a simple way to comply. He said the site could soon be available in other states where title associations give their consent.
Other competitors in the online title insurance space include Fairclosingcosts.com, a site built with the help of a Ford Foundation grant by Laguna Niguel, Calif.-based Mortgage Grader (see story).
Pennsylvania-based EnTitle Insurance Co. is selling title insurance policies online through Entitledirect.com, which also provides a control panel for managing the entire closing process and accessing documents (see story).
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