Good afternoon —
I love earnings season, especially since so many companies in our industry are now public. This year it's been exciting to see how often title figures into the strategy of real estate, mortgage and fintech companies looking for more profits.
For example, real estate brokerage Compass lost $100 million in the third quarter, but CEO Robert Reffkin is optimistic that they'll become profitable in 2022, partly due to a heavy investment in title. Compass has acquired a bevy of title companies over the last 12 months — part of its strategy to own all parts of the real estate transaction. On Compass' earnings call, Reffkin outlined the benefits of incorporating title and other mortgage services.
"First, these adjacent services will enhance our long-term profitability profile. Second, integrating these services into the platform will empower agents to deliver a more integrated, seamless experience to their clients, contributing to higher attach rates; and third, the best thing about the adjacent service business model is that there's little to no incremental customer acquisition costs for Compass because our agents already have the client relationship."
That upside is what has everyone interested in title, but title companies aren't sitting still either.
First American, the nation's second-largest title insurance company, invested $292 million into 16 different venture-backed proptech companies as of Sept. 30. Reporter Brooklee Han talked with Paul Hurst, managing director of First American's venture investments, about the company's strategy.
"We're among a limited number of companies and investors that can bring significant capital, as well as deep knowledge, authoritative data and a high level of technology expertise, to the digital transformation of title and settlement and the real estate transaction process," Hurst said. "Moreover, it affirms our position as a premier destination for industry talent and reflects our commitment to attract the very best technology talent required to drive the digital transformation of real estate transactions."
Attracting new talent is going to be crucial if the industry hopes to grow into its potential. Title is often a family business, with kids joining parents or grandparents for a successful career. But with the title business expanding, that talent pool is too shallow to support continued expansion. Read our deep dive into that topic in the article: The title insurance industry has a talent problem.
Until next week —
Sarah Wheeler
HousingWire Editor in Chief
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