January 27, 2011-

The Ohio Association of Independent Title Agents (OAITA) today released findings from a two year study of Ohio’s real estate consumers concerning their settlement service preferences.  Here are the highlights from the Executive Summary:

More than three out of four real estate consumers depend upon a referral to select their title insurance agent and/or escrow agent.

  • Only 23% of respondents independently selected their title insurance agent/escrow agent for their real estate transaction.
  •  77% of respondents did not independently select their title insurance agent/escrow agent for their real estate transaction.

Those real estate consumers who independently select their own title insurance agent/escrow agent primarily depend upon “word-of-mouth” or reputation to find their selection, not media advertising methods.

  •  47% of those who independently selected their own title insurance agent/escrow agent used “word-of-mouth” or reputation to learn about their selection.
  • 27% were return customers.
  • Only 3% of those responding learned of their title insurance agent/escrow agent through the use of Internet or print advertising.

Real estate consumers are most impacted to choose a title insurance agent by the referrals of real estate agents/brokers and mortgage companies and brokers.

  • 40% of respondents cited real estate agents and brokers as the most influential in selecting a title insurance agent.
  • 34% of respondents cited mortgage companies and brokers as influencing their selection of a title insurance agent.
  • 5% of respondents cited banks as influencing their selection of a title insurance agent.

Real estate consumers do not become more comfortable with the title insurance services offered by a title insurance agent when they know that the party who referred them to the title insurance agency owns a financial interest in the agency.

  • Only 9% of respondents said they were more comfortable with the title insurance offered by a title insurance agency owned by the referral source that referred them there.
  • 38% of respondents said they were less comfortable with the title insurance offered by a title insurance agency owned by the referral source that referred them there.

Nearly three out of every four real estate consumers think it is important or very important for a title insurance agent to be a neutral third party in determining what matters may affect their title.

  • 72% of respondents want a neutral title insurance agency handling their insurance.
  • Only 6% of respondents believe that neutrality is not important.

Real estate consumers do not prefer title insurance agents that share ownership with a real estate firms, mortgage companies, banks, or others.

  • Only 6% of respondents prefer a title insurance agent that shares ownership with a referral source.
  • 50% of respondents prefer a title insurance agent that does not share ownership with a referral source.
  • 44% of respondents expressed no preference.

Real estate consumers believe it is a conflict of interest for a referral source to receive a share of the profits from selling title insurance or providing escrow services.

  • 57% of respondents believe that it is a conflict of interest to receive a share of profits.

Real estate consumers believe it is a conflict of interest for a referral source such as a bank, real estate firm or mortgage company to provide compensation to their employees for referring their settlement work when they get a financial benefit from the referral.

  • 58% of respondents believe it is a conflict of interest for a referral source to give compensation to their employees for referring settlement work if they receive a financial benefit from the referral.

To find out more about the OAITA and the SPS they conducted, please click here.

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