Securing completions

Angela Faherty

April 5, 2008

How difficult should it be to find a firm to install some fencing? Compared with buying and selling houses, it should be a breeze, shouldn’t it? Apparently not.

Realising recently that of the four companies I’d phoned for a quote, precisely none had managed to call me back, it struck me how vital it is to convert potential customers, particularly when market conditions are less than favourable.

We are all aware of the impact the credit crunch has had on the UK mortgage market. Lenders are becoming increasingly selective in their lending criteria and returning to pricing on risk rather than pricing to gain market share.

The watchword will be quality rather than volume. Inevitably brokers are finding their income levels dipping and an already squeezed market being strangled.

A secret weapon

For intermediaries it has never been more important to drive through completions as quickly and securely as possible, but given the complexity of conveyancing this is sometimes easier said than done.

However, there is a secret weapon even more potent than a fencing installer with a price list and a calculator to help you convert those potential customers: title insurance.

Often misunderstood, title insurance is a simple and inexpensive product which protects the lender and/or borrower against losses arising from disputes over the ownership of the legal title to a property. It eliminates the need for a solicitor to carry out various parts of the conveyancing process, and can dramatically cut the time to completion.

For the intermediary, a faster completion time reduces the number of abortive cases, allows a broker to take on more cases, and also increases customer satisfaction. What is more, a faster completion means procuration fees are banked sooner. The net result for brokers is increased efficiency and profitability.

Problems and defects

It is estimated that one in four properties in the UK have some sort of problem relating to their legal title.

Examples include undocumented rights of access, breaches of restrictive covenants, buildings constructed without appropriate planning consent, failure to obtain necessary building regulations approvals, transfers of property at undervalue, HM Land Registry errors and loss of documents such as title deeds or National House Building Council certificates.

For those defects which become apparent during conveyancing, defective title insurance or legal indemnities offer a good solution. Usually bought by a solicitor, legal indemnities protect an owner against any future liabilities resulting from the identified defect and allow the conveyancing process to continue without hold-up due to protracted investigations.

However, these defects do not always come to light, and in such cases – where the solicitor could not reasonably be expected to have identified them – a title insurance policy will guard against losses should any problems with the title or validity of the mortgage arise in future. This can be purchased by a mortgage lender to protect their asset, or by a broker or the borrower themselves.

For the intermediary then, to be able to propose a solution to potential title defects could be just the secret weapon needed to drive that deal home, and fast.

Recent in-house research shows a dramatic shortening of the conveyancing process from four to eight weeks on a non-title insured remortgage to just one week with it. Cutting the time to completion is the key to improving conversion rates.

These figures show a dramatic reduction from the industry average of 30 per cent aborted cases, to less than 5 per cent with title insured conveyancing. Crucially, the faster the completion process, the happier the customer. Happy customers lead to word of mouth recommendations and repeat business.

So for the price of a one-off premium typically costing less than £90, title insurance can provide a great way of helping you convert those customers.

Unfortunately it seems that ‘Fencing If We Feel Like It Inc.’ does not share the same business sense, so it looks like I’ll be out in the garden this weekend with 100 chestnut posts and a sharp spade.

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