Southwest Florida Title Insurance & Real Estate Blog

I caught a local realtor’s Facebook post a week ago and it reminded me of what we find is one of the major issues with joint ventures (JVs) and affiliated business arrangements (AfBAs) in the title and real estate industry.

Here is the post in question.

Chris asks the right question and the answer is simple.  The only plausible way that this abysmal quality may exist is within a JV or AfBA.  Let’s look at why.

Affiliated business arrangements don’t have to compete

In the title industry, JVs/AfBAs are typically companies owned by developers, builders, real estate brokers or lenders.  JVs allow those parties to capture another stream of revenue related to their primary businesses.

With the proper disclosures and as long as they meet certain requirements, JVs operate legally under federal and state laws.  That’s not the problem.  The problem is that because of the nature of how JVs/AfBAs get their business, they are not products of the open market and do not have to operate as such.

Most JVs don’t have to compete for their business.  In Chris’ example, the builder/developer likely owns the title company and incentivizes the use of that company for each new construction sale.

It gets business whether it has earned it or competed for it or not.  Because a JV isn’t forced to compete for its business, it is not likely to have the qualities of a company that has been borne from competition.

The JV will not have had to innovate; invest in technology; invest in its staff, whether through hiring experienced professionals or through training and improvement; maintain distinctively extraordinary levels of service; nor create exceptional experiences for the real estate professionals and consumers it serves.

It will, as Chris related in her post, not have to care that their “closer” can’t explain the settlement statement.  The title company is still going to get the business!

I don’t begrudge the attempt to capture additional streams of revenue.  But I absolutely begrudge the attempt if it negatively affects the experiences which real estate professionals and consumers deserve.  So what can we do?

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My husband Brad is a real estate agent and he just bought this amazing digital laser measuring tool and I have to tell you, it was such a great buy!

I’m surprised we hadn’t found it sooner because I’m always on the lookout for cool products and tools for the home industry.

After watching the video above, if you’d like to learn more about it and how it can simplify your life, especially if you’re a Realtor®, check out this article I wrote for Progressive Builders.

If this thing makes your life and/or your job easier, I want to hear about it! Tell me how in the comments section.

-Jillian

A Real Estate Closing refers to the meeting where ownership of the property is legally transferred to the buyer.

First, there is the parade of munchkins welcoming the buyer to the wonderful world of home ownership.

Then, there arrives the ceremonial unicorn. She is often late, so don’t panic. But it’s quite a special moment.

This is the tenth of 10 Tips for Selling Your Real Estate, FSBO which can be downloaded for free.

Shortly after that, the title company’s butler brings in your choice of champagne, followed by a platter of above average appetizers.

In the meantime, the title company masseur will be working on the buyer’s back while they preview some papers. Some title companies will provide a person to give them a pedicure at the same time, but recent budget cuts have seen this perk fade away.

Toward the end of the closing ceremony, you (as the former owner) will appear, previously this was through a smoke machine, but in today’s economic climate, you will normally just enter through some balloons.

The munchkins and unicorn will return, and on perfect cue, the agents, lawyers, title company staff, and the munchkin crew will sing the buyer a personal “Welcome Home” song followed by a unique delivery of the keys (Some have seen them come in the mouth of a St. Bernard, or a dove’s tail, or even floating down in a parachute from of a colorful display of fireworks.

You, as the seller, will be greeted by a congratulatory committee who will take you to your “home sale celebration” while your belongings are moved out of the previous home and into your new location.

What to Really Expect at a Real Estate Closing

Just kidding. Maybe one day we can provide you with a more exciting experience, but for now, we just promise to make your closing day as easy and enjoyable as possible. We can assure you it will be a memorable day, and very “exciting” in its own right. Here’s what you can actually expect.

The process usually only takes about an hour, and you’ll just need to practice holding a pen and make sure you’ve had your morning coffee and perhaps a bowl of Wheaties.

Payment

At closing, the specified party will be paying for his or her share of the closing costs. As the seller, your costs will be deducted from your gross proceeds from the sale.

The HUD Uniform Settlement Statement (which both you and the buyer will sign) will detail the closing costs (plus all the monies involved in the transaction), as well as who is expected to pay them.

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