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As the housing market rebounds, landlords are forecast to purchase more apartment complexes at higher prices, boosting demand and raising prices for escrow and title services. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has updated a report on the procurement of Escrow and Title Services in its growing collection of procurement category market research reports.
Los Angeles, CA (PRWEB) June 25, 2014
Escrow and title services have a buyer power score of 3.0 out of 5. Buyers have a moderate amount of negotiation power with title insurers due to medium switching costs, low volatility in prices, high competition among small and medium-size suppliers and stability of the suppliers' financials. However, says IBISWorld research analyst Aileen Weiss, few available substitutes and a high market share concentration among the top four suppliers hurt negotiation power. Overall, demand for services stems from stronger construction activity, a growing number of businesses and greater property sales, all of which enable price growth.
Moderate switching costs allow buyers to change suppliers in the middle of the contract with few costs incurred. This factor keeps suppliers motivated to maintain high-quality title research and ensures that title insurance policy prices remain at appropriate levels. In addition, though demand is rising for title insurance, prices are not increasing at a faster rate due to the competition among small and medium-size suppliers. The overall market has a high level of concentration, but this factor is mainly due to the significant market shares held by the largest suppliers, says Weiss. The smaller suppliers face heavy competition and keep their prices low and are willing to negotiate, thus increasing buyer power. Also, due to heavy regulations involving the level of liability reserves that suppliers must keep, escrow and title service suppliers are financially stable. The low risk of bankruptcy among suppliers gives buyers greater confidence when choosing a supplier, helping to increase the number of suitable suppliers, in turn increasing buyer power. Current major suppliers include Fidelity National Financial Inc., First American Financial Corp., Old Republic International Corp. and Stewart Information Services Corp.
Buyer power is hindered by the low availability of substitutes, though, because buyers have few options besides purchasing title insurance from a title insurer. The only other recourse for buyers is to conduct their own title research, but this still leaves buyers open to a lawsuit if the research is not thorough enough. Additionally, the high market concentration provides little incentive for the large suppliers to negotiate their prices. Due to their large market shares, these suppliers can afford to set their prices higher and still attract customers. For more information, visit IBISWorlds Escrow and Title Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of escrow and title services. Title insurers offer protection for the buyer in case there are any claims to the title of the property, such as liens or forgeries. Escrow services involve a neutral third party that handles the paperwork, money, transaction instructions and other details for purchasing the property. This report does not include property management or real estate brokering.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorlds procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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