Normally this wouldn’t be big news…but when Northpoint Title decided to drop their rates well below market and agressively try to pull existing title orders from other companies only to raise their rates one month later, I think it’s worthy some attention. Here’s an example of an email from a Northpoint rep to a real estate agent (dated June 16, 2008):
"Just checking in to see what you thought about the new title rates. Can you believe we are 28% lower?? This is fantastic! Here is a price comparison on an average sales price of $275,000:
OUR RATE: $605.00
This is a big difference in the bottom line for your clients. Let me know if you have any titles you would like me to pull over. I would be thrilled to help you out!"
Northpoint is a Landamerica "venture". This email excludes the other local Landamerica title companies (which represent 25% of the total resale market in King County alone), Commonwealth of Puget Sound and Rainier Title who’s title rates (at the time) were 33% higher than Northpoint at this price point.
This tactic was used an attempt to gain title business on existing transactions without any regard to what was negotiated in the purchase and sale agreement. Not to mention the effort or cost involved in producing the all ready provided title commitments.
Northpoint justified their deep rate cut because they were a "green" title company, promoting being paperless which many title companies are (this is not unique). From a separate Northpoint email dated June 16, 2008:
"I have some good news! Northpoint’s paperless workflow system has effectively reduced our waste and costs, resulting in tremendous costs savings. To help consumers in today’s challenging real estate market, we ahve decided to pass this savings on to your clients. We filed new, lower rates with the Office of Insurance Commissioner and the rates became effective on Tuesday, June 10th…Please pass along this good news to your clients. I look forward to working with you."
On July 7, 2008, Northpoint suddenly was not green anymore nor were they planning on passing any savings along to consumers. Just shy of one month, they filed a rate increase following their huge marketing blitz all based on rate. Presentations were being made to offices promoting the low rates even after the new higher rate was filed with the State.
Effective August 1, 2008, Northpoint’s rates are the same as Commonwealth of Puget Sound and Rainier Title. They are 33% higher than what they’ve been pushing (and pulling) over the past month. They are in line with the other title companies rates.
Title rates are not changed on a whim. If you’re a long time reader of Mortgage Porter, you know that my background is title insurance and escrow and that my husband is in the title industry. As a former manager, I can tell you that title rates are discussed and studied several weeks if not months. Not to mention the time and effort it takes to file rates with the State. (Washington title rates are public record, filed in Olympia).
In my twenty+ years in the real estate industry, I have never witnessed a title company use what appears to be bait and switch.