Home inspection findings by Frank Schulte-Ladbeck, Professional Real Estate Inspector TREC# 9073

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Will Your Title Company Be There Tomorrow?

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About a month ago, we had news that one title company doing business in Houston was closing shop due to lack of access to funds.  Large firms also do not seem to be immune from this market, although closings there are not a problem. The credit crisis poses a serious problem for these firms as the credit markets dry up.  Such  reports do raise concerns that home closings may be in jeopardy in the mind of the consumer.

Two title companies have been taken over by the Texas Department of Insurance. Guardian Fidelity Title Company and Esquire Title LLC were deemed insolvent and unable to continue their operations according to the department of insurance. Seeing that other title firms are starting up this year, I wonder if these firms (and others) simply were making bad business decisions which helped speed their demise. For example, most of these firms gain their clientele through relationships with Realtors. My business runs along the same lines. If the Realtors I work with are not driving clients my way, then I would have a difficult time. It could be that these firms also suffered from a marketing problem: not connecting with the right Realtors.

Should you be worried about your home closing at a title company? Easy answer: most likely not. Firms pulling out of this market are working to ensure scheduled closings will happen, and the firms taken over by the TDI are being overseen so that all scheduled closings will go through without a problem. There have been cases around the country were title companies do dramatically shut their doors, but since Realtors need the closings to go through too, they would be finding ways to have the sale come to completion. The concern then would be the earnest money held in escrow by the closed firm.

The plight of the title companies does indicate that the housing market is not so rosy in Houston. I realize that Houston has been showing up on various lists indicating that this is the city to be in and to purchase a home. The Houston Association of Realtors would love for that to be the only news, but we cannot hide the fact that home sales are decreasing, and inventory has been going up in Houston. Actually, this may not be bad news if you are a real estate investor, because it does mean more people are renting.

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© Frank Schulte-Ladbeck Professional Home Inspector Houston, Texas
Frank Theodor Schulte-Ladbeck
home inspector, TREC# 9073
Houston , Texas , 77063 United States

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