Earlier this year, the National Association of Independent Land Title Agents (NAILTA) commissioned the first ever public study of American real estate settlement consumer preferences. Known as the NAILTA SPS, the survey was given to real estate consumers at the time of their closing through a simple-to-complete five question process.
The goals of the survey were simple.
- Discover whether American consumers understand their legal right of choice when it comes to shopping for title insurance service providers.
- Clarify whether American consumers believe it is important that their title insurance service provider remain neutral in determining and disclosing matters that may affect their title.
- Discover the preferences of American real estate consumers in light of the fact that some real estate settlement service providers hold incentivized financial interests in the referral of business.
We are pleased to announce that the results of the survey have been completed and the message from American real estate consumers is clear — when they are not being steered to use a particular provider, real estate consumers prefer to use independent real estate service providers.
Approximately 1,000 real estate consumers responded to the national survey and the results have been summarized in the following Executive Summary.
Some of the highlights of the survey include:
- 82% of respondents said they”did know” that they have a legally protected right to “shop” for title insurance services.
- 93% of respondents think it is important for their title agent to be neutral in determining and disclosing what matters may affect their title.
- 55% of respondents did not know that referral sources are generally prohibited from being licensed as title agents or solicitng title insurance business.
- Nearly two thirds of respondents said a title agent could not be objective as it pertained title insurance matters if the shared ownership with a referral source.
- Less than 2% of respondents prefer a title insurance agent that shares ownership with a referral source.
The NAILTA SPS echoes the same state survey conducted by Ohio in 2009 and 2010. The results are telling and consistent. When American real estate consumers learn how their business is shopped and incentivized for referral in a controlled business arrangement, they no longer prefer to be involved with those entities, whether because of the obvious conflict of interest or the fact that they understand any business that can give away half of its profits to encourage referral is clearly charging the customer too much for insurance.
Share the results of this study with your customers. Let them know what America is saying about controlled business arrangements, one stop shops and the unseemly business of incentivized referral systems.
For more information on NAILTA, please visit our website at www.nailta.org.