J T

I am not sure why you are directing your response to me. I have not participated in this thread. As of late I have not been very active on SOT. However, now that you have brought me into the conversation, I will comment.
 
I have no problem with anyone running their business as they see fit. As far as low ball pricing is concerned, whether you can live with it or not depends largely on the region in which you operate. I am not sure how things are done in up state New York. In so far as southern New England is concerned, it is one of the most expensive areas of the country in which to live and operate a business. The problem is exacerbated by the political organization of Connecticut. We have no county government . All land records are recorded in the individual town halls...requiring much travel time on the road. Consequently, the price of gasoline is a major consideration in the pricing of your title search. If someone is charging $25 to $35.00 for a current owner search in this area, he has to be cutting corners somewhere else. What he gives up in the price of an individual search he needs make up in daily volume. In other words in order to cut his price by 50% he needs to double his daily output of work in order to break even. The town halls are open only 8 hours per day with a few exceptions. Some operate on a part time basis. It takes time to drive from one to another. How does one double his daily output of work without sacrificing quality? The time constraints alone do not allow it.

There is a particular business entity that has been critiqued on SOT because of its low pricing and difficult terms of service. I know of at least two searchers in this area that have thrown up their hands in disgust, and rejected further assignments because they could not prossibly provide the requested service at the low rate paid to them.

This was confirmed to me by one of the town clerks recently. She had observed a number of newbie searchers lately in the town of Wolcott, Ct. The town has recently installed a computer (not on line) to store its internal land records. She noticed the newbie searchers rushing in to perform their search on the computer without recourse to the written index, and rushing out the door to their next search. What the newbie searcher failed to consider is that the Town of Wolcott keeps its sewer liens in separate index not included in the computer index. The newbie searcher walked out the door to his next search without even considering the potential for encumbrances in the sewer lien index. The town of Wolcott, Ct is not alone. Because of the way Connecticut is organized, each town has its piculiarities with respect to the way each maintains its land records.

In so far as organizing abstractors into a union or forming their own abstracting/title company to preserve their interests...I have suggested these approaches at various times over the past 18 months. The suggestions met with mixed reviews either because of apathy or the financial inability of the individual searchers to come forward with the capital investment. Consequently, I do not see any remedy to the problem.
The issue will therefore only be rectified through the economic pressure to the market place. It will probably take several years before a determination is made as to whether the cut rate search, outsourced electronic search or the traditional brick and morter search is the most efficient.

In the case of my firm, we have never allowed abstracting to comprise an
unreasonably large portion of revenue. We are in the process of phasing out abstracting even further, and replacing the lost revenue with other more profitable areas of the real estate industry. We still maintain a limited list of abstracting clients who understand that quality costs a little more, and are willing to pay for the difference. We still accept new clients...but on our terms and at our prices.

As with all business in a free enterprise system the most efficient survives. The question is whether efficiency is determined by price or quality of service. If the searcher offering the $25 search can provide a quality product, he has won the game in the best American free enterprise tradition. He has invented the better mouse trap. Those that are unable to compete will need to find better ways to become competitive or find alternate lines of endeavor. Robert recently published an article in which he declared that this business is not longer profitable. He is right. If a searcher is limiting the services he markets to one service alone (abstracting) he is programmed for failure.

I really take offense at your posting. You have misstated my position in this matter.Do not ever condescendingly accuse me of viewing a free market system as an "infringement" on business or a "sour grapes" approach. I do see the death knell of the traditional abstractor approaching, and I have critized the V/M's, title companies and lenders for fostering an environment in which cheap price rather than quality of services was the preferred commodity. My counsel on this board has consistently been for its members to find better ways to compete... value added approach...form their own national/regional title companies...combine their abstracting with other services to lessen the impact of the low ball pricing.