Los Angeles, California (PRWEB) December 05, 2013
Escrow and title services have a buyer power score of 3.4 out of 5. Buyers have a decent amount of negotiating power with title insurers due to the low switching costs, low volatility in prices and stability of the suppliers' financials. “The low switching costs allow buyers to change suppliers even during the contract with very little cost incurred,” says IBISWorld procurement analyst Caitlin Newsom. This factor keeps suppliers motivated to maintain high quality title research and ensures that title insurance policy prices remain low. Additionally, prices for title insurance have only risen slightly over the past three years and are expected to rise slowly over the three years to 2016. Although this increase in price limits buyer power, it is slight enough that the potential risk to buyers is minimally affected. Even though demand is rising for title insurance, prices are not increasing quickly due to the competition among medium- and small-size suppliers. The overall market has a high level of concentration, but this is mainly due to the significant market shares held by the largest suppliers. The smaller suppliers are faced with heavy competition and thus keep their prices low and are willing to negotiate, increasing buyer power. Also, due to heavy regulations involving the level of liability reserves that suppliers must keep, the suppliers of escrow and title services are financially stable. The low risk of bankruptcy among suppliers gives a buyer greater confidence when choosing a supplier, helping to increase the number of suitable suppliers, in turn increasing buyer power.
However, buyer power is hindered by the low availability of substitutes. A buyer of escrow and title services has few options besides purchasing title insurance from a title insurer. The only other recourse for the buyer is to conduct their own title research, but this still leaves the buyer open to a lawsuit if the research is not thorough enough. “Additionally, the high market concentration gives little incentive for the large suppliers to negotiate their prices,” says Newsom. Due to their large market shares, these suppliers can afford to set their prices higher and still attract customers. Major suppliers include Fidelity National Financial Inc., First American Financial Corporation, Old Republic Internation Corporation and Stewart Information Services Corporation.
For more information, visit IBISWorld’s Escrow & Title Services procurement 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
Vendor Financial Benchmarks
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, IBISWorld’s 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.