We’ve gotten quite a few requests over the years from title agencies to bundle up their title services in the closing fee, inside the TitleCapture Title Agency App. More than ever, after the TRID rule kicked in. Many agencies, however, still prefer to list out each individual service in the C or H section of the Loan Estimate or Closing Disclosure.
We believe bundling is good for business, given a few things are clear to the consumer, otherwise it could be detrimental.
There are two ways to look at things. One is the “business” way and the other is the “ethical” way.
The Business Way
The business angle is that bundling everything in one closing fee is actually very easy for all parties involved. First of all, the real estate agent doesn’t have to explain what each of those “title search”, “doc handling”, etc. lines actually mean. So, for one, those people will love you for it. Lenders might too.
The consumer himself will feel this is a breeze and closing will cost him $X, while title insurance is $Y, and that’s that.
One caveat though. When something sounds too good to be true, it probably is.
If your real estate agent is presenting multiple agencies’ quotes to the consumer (this is really happening with lenders at the helm), the consumer’s attention will be focused more on the closing fee, and if yours is bundled, it will somehow look like you are more expensive than some other agency.
To counter that, make sure your fee is actually named something like “Title – All Inclusive Closing Fee” or “Title – Title and Closing Services (all inclusive)”. Just avoid putting “Closing Fee” in there. This will make it difficult for the consumer to just compare A to B and it will force him to actually focus and understand that this is an all-inclusive fee.
Also, if you do have an all-inclusive fee, make sure it really is what it says it is. Putting other fees next to it defeats the purpose. Trust us, we’ve seen that too.
So, we really believe that since you need to focus on the ease of use and the experience of the people you’re serving, bundling makes a lot of sense, provided you do play a bit of defense as well.
The Ethical Way
Now, the “ethical” angle.
Some agencies believe it’s actually ethical to list each individual service and be transparent. We couldn’t agree more, and in an ideal world this should be the norm. We would actually vote for that, however, when we look around us, reality hits us hard.
Everything is dumbed down, made easy. Consumers don’t care about accuracy or transparency, they just need the low-down, the overview. And this is a trend that will continue throughout the years. We live in such an information-heavy society that consumers will actually pay to be provided with the summary, not the detailed information.
So, because of this, even though we believe transparency and fairness and ethics should always prevail, as long as you are not doing anything misleading, we think that bundling your services in one fee actually benefits you more as a business.
However, don’t take our word for it. Try it. Experiment and measure your feedback from your Realtors and Lenders. Our title agency app actually allows you to bundle. Moreover, it allows you to have a graduated closing fee, just in case you need it to go up or down, depending on the sales price or loan amount.