WWW.IBISWORLD.COM Conveyancing Services in the US July 2019 1

Good title: The housing market’s revival is expected to stimulate industry growth

This report was provided to Seattle Pacific University (2134529962) by IBISWorld on 31 December 2019 in accordance with their license agreement with IBISWorld

IBISWorld Industry Report 54119 Conveyancing Services in the US July 2019 Gordon Zheng

2 About this Industry 16 International Trade 29 Technology and Systems 2 Industry Definition 17 Business Locations 29 Revenue Volatility 2 Main Activities 30 Regulation and Policy 2 Similar Industries 19 Competitive Landscape 31 Industry Assistance 3 Additional Resources 19 Market Share Concentration 19 Key Success Factors 32 Key Statistics 4 Industry at a Glance 19 Cost Structure Benchmarks 32 Industry Data 21 Basis of Competition 32 Annual Change 5 Industry Performance 22 Barriers to Entry 32 Key Ratios 5 Executive Summary 23 Industry Globalization 33 Industry Financial Ratios 5 Key External Drivers 7 Current Performance 24 Major Companies 34 Jargon & Glossary 9 Industry Outlook 24 Fidelity National Financial Inc. 11 Industry Life Cycle 25 First American Financial Corporation 26 Stewart Information Services 13 Products and Markets Corporation 27 Old Republic International Corporation 13 Supply Chain 13 Products and Services 14 Demand Determinants 28 Operating Conditions 28 Capital Intensity 15 Major Markets www.ibisworld.com | 1-800-330-3772 | [email protected] WWW.IBISWORLD.COM Conveyancing Services in the US July 2019 2 About this Industry

Industry Definition This industry is composed of companies to another, requires specialists to advise and legal practitioners that provide parties, prepare documentation and conveyancing services to individuals conduct the settlement process. Other and corporate clients. Conveyancing, which industry offerings include arbitration is the process of transferring ownership of services, expert witness services and land or property from one person or entity assistance with intellectual property claims.

Main Activities The primary activities of this industry are Real estate settlement services Real estate title abstract services Real estate title search services Title search companies, real estate Paralegal services Patent agent services (i.e., patent filing and searching services) Process server services

The major products and services in this industry are Patent copyright and other intellectual property document services Process services Title search and other document filing services Title, abstract and settlement services Other

Similar Industries 52412 Property, Casualty and Direct Insurance in the US Operators in this industry directly underwrite insurance policies that protect from loss associated with property and casualty, title and other risks.

53132 Real Estate Appraisal in the US Operators in this industry specialize in estimating the fair market value of real estate. Appraisers research a property or development to determine the characteristics pertinent to its market value.

54111 Law Firms in the US Lawyers may provide expertise in a range of areas or in specific areas of law, including real estate law.

54199 Credit Counselors, Surveyors & Appraisers in the US Operators in this industry primarily provide quantity surveyor services, also known as cost estimation; estate appraisal services (except real estate); or consumer credit counseling services.

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About this Industry

Additional Resources For additional information on this industry www.alta.org American Land Title Association www.mba.org Mortgage Bankers Association www.nar.realtor National Association of Realtors www.census.gov US Census Bureau

IBISWorld writes over 1000 US industry reports, which are updated up to four times a year. To see all reports, go to www.ibisworld.com

Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019 4 Industry at a Glance Conveyancing Services in 2019

Key Statistics Revenue Annual Growth 14–19 Annual Growth 19–24 Snapshot $17.7bn 2.8% 1.1% Profit Wages Businesses $2.5bn $5.4bn 36,040

Revenue vs. employment growth Existing home sales Market Share Fidelity National 30 12 Financial Inc. 20 9 12.8% 6 10 First American 3 Financial 0 Corporation  % change % change 0 10.1% -10 -3 -20 -6 Stewart Year 11 13 15 17 19 21 23 25 Year 13 15 17 19 21 23 25 Information Revenue Employment Services SOURCE: WWW.IBISWORLD.COM Corporation  Products and services segmentation (2019) 3.9% 2.1% Patent copyright and other intellectual property document services p. 24 5.3% Process services 11.8% Key External Drivers Other Existing home sales Value of private nonresidential construction 15.0% 30-year conventional Title search and other mortgage rate document filing services 65.8% Housing starts Title, abstract and settlement services House price index

p. 5

SOURCE: WWW.IBISWORLD.COM

Industry Structure Life Cycle Stage Mature Regulation Level Heavy Revenue Volatility Medium Technology Change Low Capital Intensity Low Barriers to Entry Low Industry Assistance Low Industry Globalization Low Concentration Level Low Competition Level Medium

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 32

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Executive Summary The Conveyancing Services industry 5.0% over the five years to 2019, provides specialized legal services to bolstering the number of homes individuals and businesses, generally in requiring industry services. This trend the context of property transfers or title has been reinforced by the growth in the disputes. Operators offer title searches, value of construction, rising an document preparation, filing services, annualized rate of 2.1% during the arbitration services and assistance with current period. Moreover, the consumer intellectual property claims. Rising confidence index has increased at a demand from real estate, increases in the strong annualized rate of 7.5% over the number of housing starts and existing past five years, providing steady home sales, coupled with overall growth downstream demand for operators. in nonresidential construction, has Although an overall increase in the sparked demand for industry services. 30-year conventional mortgage rate has Overall, industry revenue is expected to increased the financial burden of increase at an annualized rate of 2.8% to homeownership, the strong demand from downstream markets have sustained and increased industry revenue. The industry has benefited substantially from Over the five years to 2024, industry revenue is projected to continue rising, surging growth in housing starts albeit at a slower pace due to slowdowns in economic factors affecting real estate $17.7 billion over the five years to 2019, markets. Moreover, house prices, as including a projected growth of 1.0% in measured by the house price index, are 2019 alone. Industry profit, measured as expected to continue rising at an earnings before interest and taxes, is annualized rate of 2.3% after reaching expected to decline during the five- highs during the current period, indicating year period. that homes will become prohibitively Due to the fact that this industry’s expensive for many consumers. performance is closely aligned with the Tightening lending practices and health of the US real estate market, the anticipated increases in mortgage rates industry has benefited substantially from are expected to exacerbate industry surging growth in housing starts. threats. Overall, IBISWorld estimates that Rebounding from a post-recessionary industry revenue will increase modestly low, housing starts in the United States over the five years to 2024, rising at an have increased at an annualized rate of annualized rate of 1.1% to $18.6 billion.

Key External Drivers Existing home sales 2019, representing a potential Existing home sales measure the sale of opportunity for the industry. existent single-family homes, condos and co-ops in a given year. The volume of Value of private nonresidential sales is a key measure of demand for construction homes, which is the single largest asset The value of private nonresidential for many families. An increase in the construction comprises expenditures on volume of existing home sales boosts office buildings, hospitals, factories and demand for conveyancing services and other nonresidential structures. increases industry revenue. Existing Increased demand for nonresidential home sales are expected to increase in buildings causes the total number of

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Industry Performance

Key External Drivers commercial property transactions to started in a given year. The industry continued increase, which generates demand for benefits from an increase in housing conveyancing services. The value of starts because it increases the supply private nonresidential construction is of homes available for purchase, which projected to increase in 2019. then require conveyancing services as titles are transferred between parties. 30-year conventional mortgage rate Housing starts are expected to increase The 30-year fixed rate mortgage is the in 2019. most common type of loan for home purchases in the United States. A decline House price index in mortgage interest rates will increase The house price index measures trends the level of home sales by making homes across the national housing market and more affordable. Therefore, as the adjusts for the quality, size and location 30-year conventional mortgage rate of homes. An increase in this index increases, industry revenue falls. The indicates that homes are becoming more 30-year conventional mortgage rate is expensive, which limits real estate expected to increase in 2019. activity as many homes become too costly for consumers. The house price index is Housing starts projected to increase in 2019, Housing starts measure the number of representing a potential threat to new privately owned housing units industry operators.

Existing home sales Value of private nonresidential construction

12 15

9 10 6 5 3 0 % change 0 % change

-3 -5

-6 -10 Year 13 15 17 19 21 23 25 Year 13 15 17 19 21 23 25

SOURCE: WWW.IBISWORLD.COM

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Industry Performance

In recent years, the Conveyancing Services Current industry has continued to recover from its Industry revenue recessionary losses, with revenue expected Performance 20 to rise an annualized 2.8% to $17.7 billion over the five years to 2019; this includes an anticipated 1.0% increase in 2019. The 10 recovery of the US housing and commercial real estate markets have reinvigorated 0

existing home sales, boosting demand for % change conveyancing services among individual -10 consumers and businesses. Similarly, steady improvements in the US financial -20 sector and overall level of corporate profit Year 11 13 15 17 19 21 23 25 have driven major corporations to invest more heavily in real estate, as illustrated by SOURCE: WWW.IBISWORLD.COM growth in the value of nonresidential construction over the past five years. As services has risen. However, industry these corporate clients have increasingly growth has been somewhat hampered engaged in buying and selling properties, during the period due to steady growth in demand for title, abstract and settlement the house price index.

Surging real estate Given that everyday individuals constitute index, which measures changes in housing activity an estimated 35.8% of the Conveyancing market prices, has increased at an Services industry’s total customer base, annualized rate of 5.0% over the five years changes in the residential real estate to 2019, representing a consistent rise in market have a significant influence on the prices of US homes. While a large industry performance. Therefore, a large portion of this increase can be attributed to portion of the industry’s recent growth can the housing market’s recovery following the be attributed to the dramatic rise in the economic downturn, the house price index number of housing starts that occurred has already substantially surpassed over the past five years. This figure, which pre-recessionary peaks. As a result, future measures the number of new, privately increases in this index will likely indicate owned housing units started in a given record-high home prices, negatively year, has increased at an annualized rate of affecting industry revenue by restricting the 5.0% over the five years to 2019, largely as number of consumers who can afford to a result of a low post-recessionary base and engage in real estate activities. Moreover, historically low mortgage rates. Similarly, while the 30-year conventional mortgage the volume of existing home sales has rate has fluctuated year-to-year, this figure grown at an annualized rate of 1.8% during has exhibited an overall increase in recent the same period, totaling an estimated 5.4 years, growing at an annualized rate of million sales in 2019. As the industry 0.5% during the current period. This relies on real estate transactions, the growth makes homeownership relatively Conveyancing Services industry has expensive, preventing some consumers benefited significantly from surges in home from investing in real estate and hiring construction and property sales. conveyancing service providers. However, growth in the residential real Though the commercial real estate estate market has been hampered by an market’s revenue has not grown as increasing US house price index. This dramatically as its residential counterpart

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Industry Performance

Surging real estate over the past five years, this sector’s growth economic conditions have yielded steady activity continued has substantially helped providers of increases in corporate profit, which has conveyancing services. Over the five years increased at an annualized rate of 2.5% to 2019, for example, the value of private during the current period. Strong profit nonresidential construction has grown at enables downstream companies to an annualized rate of 0.3%, increasing the invest more heavily in properties and number of buildings and properties in need real estate, generating demand for of industry services. Moreover, improving industry services.

Industry landscape The Conveyancing Services industry’s which helped boost the company’s market share concentration among the industry-relevant revenue while other major players has risen over the past five operators experienced losses due to years. The industry’s four largest players declining mortgage originations. Despite primarily engage in property and direct consolidation among the industry’s major insurance activities, while also generating players, this industry has a large amount industry-relevant revenue from title and of nonemployer enterprises, and more escrow services. Collectively, these are expected to enter. The total number companies account for an estimated of industry enterprises is estimated to 28.8% of total industry revenue in 2019. grow at an annualized rate of 3.0% to Most notably, Fidelity National Financial 36,040 companies over the five years to Inc. (FNF) has increased its market share 2019. Furthermore, the total value of through a series of major acquisitions. In industry wages is projected to increase an particular, the company acquired Lender annualized 1.9% to $5.4 billion during the Processing Services Inc. in January 2014, same period.

Increasing Participation in this industry is highly competition sensitive to changes in its level of demand. Participation in this In 2014, for example, the number of existing home sales declined 2.9% to 4.9 industry is highly million sales, limiting demand for the sensitive to changes in its industry’s residential title services. As a level of demand result, industry revenue between 2013 and 2014 decreased 8.1%. Even FNF, the industry’s largest player, recorded an the number of total employees is expected industry-relevant profit margin decrease to increase an annualized 2.0% to 109,915 of 3.7%. Conversely, when existing home workers. These increases cause higher sales rebounded in 2015 with a 6.3% competition, especially among small increase, industry revenue also increased operators and nonemployers, many of a significant 5.6%. The industry has which already have lower profit. As a experienced steady downstream demand result, the increased participation and during the current period, encouraging employment has negatively affected greater competition. Over the five years to industry profit. Profit, measured as 2019, the number of industry earnings before interest and taxes, is establishments is expected to increase an estimated to account for 14.3% of revenue annualized 2.8% to 38,764 locations and in 2019, down from 17.7% in 2014.

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Industry Performance

Over the five years to 2019, the slowing down their growth, there is still Industry Conveyancing Services industry growth to be expected. Additionally, Outlook experienced strong growth as the housing rising private nonresidential construction and construction markets continued to and corporate profit over the next five recover from a low post-recessionary years are expected to generate demand base. Over the five years to 2024, the among businesses for industry services. industry is projected to experience Overall, as a result of the general slowing modest growth as it decelerates and down of major demand drivers, revenue adjusts to more mature growth in growth is expected to slow over the next construction demand, real estate five years, anticipated to rise at an demand, housing starts and existing annualized rate of 1.1% to $18.6 billion home sales. Although these markets are over the five years to 2024.

Housing market Revenue growth is expected to be stabilizes relatively modest over the next five years Revenue growth is as the recovery of the housing market slows. For example, whereas the number expected to be relatively of housing starts has experienced strong modest as the recovery of growth in recent years, it is projected to the housing market slows increase at an annualized rate of 2.5% over the five years to 2024, compared with an annualized 5.0% during the during the current period. At the same current period. This means that new, time, the 30-year conventional mortgage privately owned housing units will be rate is projected to increase at an constructed at a more moderate rate in annualized rate of 1.1% over the next five coming years, constraining demand for years. Access to loans and manageable industry operators that perform research interest rates are crucial to the growth of and prepare documents relating to the downstream housing and construction transfer of these properties. Additionally, markets. Increasing mortgage rates will the number of existing home sales is likely temper demand for homes as they expected to increase at an annualized rate effectively become more expensive to of 0.9% over the five years to 2024, purchase and pay the debt services for, compared with an annualized 1.8% thus repressing industry revenue growth.

Rising demand from Demand for industry services is highly annualized rate of 1.4% over the five businesses dependent on real estate activity; years to 2024, commercial real estate therefore, increased nonresidential activity will likely increase, stimulating construction will likely generate demand for industry conveyance and title significant revenue for operators that abstract services. specialize in providing conveyancing Increased business activity will further services to commercial clients. generate demand for other industry Additionally, major corporations are services. Industry operators also provide more likely to invest in new properties as patent, copyright and other intellectual their profit increases. Therefore, as property document services. Although corporate profit is projected to grow at an these services account for a relatively

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Industry Performance

Rising demand from small proportion of total industry invest more heavily in new marketing businesses continued revenue, increasing corporate activity will and product development activities that likely cause revenue from this service require patent copyright and other segment to increase as corporations document filing.

Growing industry Employment and enterprise figures for participation this industry are highly sensitive to Industry profitability has changes in industry profitability, since most participants are small operators been somewhat volatile that cannot remain in business when changes in the housing market and relatively constant, stagnating at 14.3% of corporate spending cause profit to revenue between 2019 and 2024. The contract. In recent years, industry profit, number of operators in the Conveyancing defined as earnings before interest and Services industry is expected to increase taxes, was slightly volatile, yielding consistently at an annualized 1.7% to surges in industry participation during 39,272 companies. Total industry periods of high profitability and swift employment is also expected to declines in participation when profit experience modest growth during the decreased. Over the five years to 2024, outlook period, rising at an annualized industry profit is forecast to remain rate of 1.2% to 116,396 workers.

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Industry Performance Life Cycle Stage Some consolidation among industry enterprises is occurring Operators are unlikely to introduce new, industry-changing products or technologies Industry revenue generally grows in line with the overall economy

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Industry Performance

Industry Life Cycle The Conveyancing Services industry purchased Lender Processing Services is in the mature stage of its life cycle, Inc. for $2.9 billion. In 2019, the characterized by consolidation, low company is set to acquire Stewart  This industry technological change and established Information Services Corporation, which is Mature  product segments. While the industry’s is only licensed in New York, for $1.2 revenue has grown at a slightly faster rate billion once the New York Department of than the overall economy over the five Financial Services approves the merger. years to 2019, this substantial growth is Nonetheless, the number of operators in largely a function of a low base caused by the industry is estimated to increase at an the subprime mortgage crisis rather than annualized rate of just 2.5% to 39,594 a true long-term growth trend. Over companies over the 10 years to 2024. the 10 years to 2024, the industry’s These trends indicate that industry contribution to the overall economy, as growth has slowed down and industry measured by industry value added (IVA), operators are now competing for is projected to rise an annualized 1.0%. dominance in a finite market, reinforcing Conversely, US GDP is projected to the industry’s mature status. increase at an annualized rate of 2.0% This industry also exhibits a low level during the same period. IVA growth of technological change and established lagging that of GDP indicates that the product segmentation. The only Conveyancing Services industry is technological innovation that has steadily declining as a share of the significantly transformed the industry in national economy. recent years has been the development of Although industry participation has more sophisticated databases that been increasing due to growing demand, facilitate online title searches. However, market share concentration within the this development does not represent a major companies has increased over the major change in the scope of services past five years, largely due high being provided. Moving forward, acquisition activity. For instance, in 2014, technological change is expected to Fidelity National Financial Inc.’s remain low, typical of mature industries.

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Supply Chain KEY BUYING INDUSTRIES 53121 Real Estate Sales & Brokerage in the US Companies acting as agents and brokers use this industry when selling real estate to others. 99 Consumers in the US Consumers use industry services when buying a home.

KEY SELLING INDUSTRIES 23611a Home Builders in the US Single-family home builders construct new single-family housing, such as single-family detached houses and town houses. 23611b Apartment & Condominium Construction in the US Multi-family home builders construct new multifamily residential housing units (e.g., high-rise, garden and town house apartments and condominiums). 23621 Industrial Building Construction in the US Companies in this industry are responsible for the entire construction (including new work, additions, alterations, maintenance and repairs) of manufacturing and industrial buildings (except warehouses). 23622a Commercial Building Construction in the US Commercial builders construct (including new work, additions, alterations, maintenance and repairs) commercial buildings and related structures. 23622b Municipal Building Construction in the US This industry constructs, alters and maintains municipal buildings and related structures.

Products and Services Products and services segmentation (2019) 2.1% Patent copyright and other intellectual property document services 5.3% 11.8% Process services Other

15.0% Title search and other document filing services 65.8% Title, abstract and settlement services

Total $17.7bn SOURCE: WWW.IBISWORLD.COM

Title, abstract and settlement services Services industry act on behalf of their Conveyancing is the term for the legal clients, prepare documents for the transfer processes that are involved in the of real estate titles and represent clients in transference of property or real estate meetings. Similarly, settlements and from one party to another. During this closings involve the completion of process, operators in the Conveyancing contracts to transfer ownership of

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Products & Markets

Products and Services property. During a closing, the buyer industry revenue and include continued delivers a check for the balance owed and notarization, certification and filing the seller signs the deed over. A lawyer legal documents such as writs, warrants, with the title company registers the new summonses, citations, libels and deed with the local land registry office and orders that are used in judicial the seller receives a check for the proceeds proceedings. Over the past five of the sale, minus closing costs and years, this industry’s process services mortgage payouts. In most jurisdictions, segment has represented a steady property transfer is official when a proportion of revenue, as sales from contract is registered at the local County process services generally grow in line Recorder’s office. Historically, this with the overall industry. segment has been a major component of industry revenue. However, while existing Patent copyright and other intellectual home sales and housing starts have both property document services experienced strong growth in recent years, Patent copyright and other these figures remain lower than their intellectual property document pre-recessionary levels, limiting demand services are estimated to constitute for conveyancing and title abstract 2.1% of industry revenue in 2019. services. Overall, revenue from title, Operators provide assistance in abstract and settlement services is preparing patent applications and estimated to account for 65.8% of the often represent the patent applicant industry’s total revenue in 2019. before bodies such as the Patent and Trademark Office. Additionally, Title search and other industry operators often conduct document filing services searches on current patent copyrights Companies that specialize in title search and research intellectual property laws. and other document filing services provide Over the past five years, this segment legal advice, representation and document has constituted a stable portion of total drafting for individuals and businesses that industry revenue. are buying or selling property. In 2019, this segment is expected to represent 15.0% of Other industry revenue. Over the five years to Other services provided by 2019, this segment has grown as a portion industry operators include of total industry revenue due to rising appraisals, arbitration, expert activity in downstream residential and witness services, business and commercial real estate markets. commercial law services, wills, estates and trusts. Collectively, Process services these offerings are estimated to In 2019, process services are expected to account for the remaining 11.8% of account for an additional 5.3% of total industry revenue in 2019.

Demand The performance of the Conveyancing Industry revenue is positively affected Determinants Services industry depends on the level of by increases in the volume of real estate activity in residential and commercial sales or transfers, which tend to occur real estate markets. This activity is when the property market and the overall affected by several factors, including US economy are strong. For example, as population trends, the condition of the levels of disposable income and overall economy and new legislation. consumer confidence rise, everyday

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Products & Markets

Demand consumers become more willing to make estate titles. Additionally, the Determinants substantial investments in homes. In diminishing average household size has continued contrast, increases in housing market increased demand for housing units, prices cause many homes to become positively affecting industry revenue. prohibitively expensive to consumers, Government legislation can also affect inhibiting real estate activity and limiting industry revenue. For example, taxpayers demand for industry services. who itemize their tax deductions have In addition, levels of real estate activity been able to deduct a significant portion are seasonal, with higher volumes of the interest paid on their residential registered during the spring and summer mortgages, which has substantially months. In terms of population and encouraged homeownership. In theory, demographic factors, population growth these deductions make homeownership tends to strengthen underlying demand more affordable, leading to increased real for housing and, in turn, services such as estate activity and greater demand for conveyancing and the transfer of real industry services.

Major Markets Major market segmentation (2019) 2.5% Government and nonprofit organizations

36.9% Individuals 60.6% Businesses

Total $17.7bn SOURCE: WWW.IBISWORLD.COM

The Conveyancing Services industry Businesses provides title abstract services, Private businesses represent the single settlement and closing services, title largest market for conveyancing services, searches and other document filling with an estimated 60.6% of industry services. Given this variety of services, revenue derived from this market many industry operators are engaged by segment in 2019. Businesses typically both private businesses and individual purchase conveyancing, title abstract and consumers. Additionally, a small settlement services to prevent legal percentage of industry services are disputes over property ownership during provided to government agencies and or after sale. Furthermore, businesses nonprofit organizations. enlist the help of industry operators to

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Products & Markets

Major Markets conduct final real estate settlements and Individuals often require help from legal continued file closing documents. Businesses also practitioners to look into liens, claims, purchase patent, trademark, copyright deeds, tax records and maps to avoid and other intellectual property document property ownership disputes. Individuals filling services to ensure that all company may also require other legal services such brands and other forms of intellectual as appraisals, expert witness services and property are protected. commercial law disputes from industry Demand from private businesses operators. As the overall economy for industry services have recovered improved, consumer confidence significantly since the recession, some experienced consistent gains over the businesses that had access to capital past five years, driving household were able to purchase real estate while demand for industry services. property values were inexpensive and interest rates were at their lowest. Government and nonprofit organizations However, now that the economy has Government agencies and nonprofit largely recovered, more businesses are organizations are estimated to account demanding industry services. Businesses for the remaining 2.5% of industry are expected to increase as a portion revenue in 2019. More precisely, the of industry revenue, as demand for federal government represents an nonresidential real estate continues estimated 1.1% of industry revenue, while to grow. state and local governments account for an additional 1.3% of revenue. The Individuals remaining 0.4% of the industry’s total Individual consumers constitute the revenue is derived from the real estate other major market for conveyancing and property transfer activities of services and are estimated to account for nonprofit organizations. These 36.9% of industry revenue in 2019. government and nonprofit institutions Individuals require conveyancing services typically employ industry services when to ensure protection when purchasing purchasing land, filing for intellectual homes and other real estate so that legal property or when these bodies are issues do not ensue after settlement. involved in property disputes.

International Trade Operators in the Conveyancing Services nature of this industry’s activities makes industry primarily offer conveyancing it difficult for operators to participate in and settlement services to domestic foreign markets. As a result, this industry clients. Moreover, the service-based does not engage in international trade.

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Products & Markets

Business Locations 2019

est AK 0.1 e ad

ME reat Md 0.4 akes tatc 1 2 NY 3 WA ND 6.7 4 MT 0.5 5 1.5 0.4 MN 2.4 WI ock 1.4 MI PA 6 SDPas 2.6 4.9 OR 0.4 7 0.8 Moutas ID IA OH 9 8 0.7 WY 1.2 3.6 0.2 IN VA NE IL 1.6 WV 0.6 2.7 0.3 4.1 KY est NV 0.8 1.0 NC UT MO 0.9 1.4 CO KS 2.1 2.1 0.8 TN 2.1 SC CA 1.0 7.8 OK AR outeast 2.0 1.3 GA AL 2.3 AZ MS 1.1 2.1 NM 0.4 0.5 outest LA TX 2.5 FL 8.7 13.4

est Establishments (%) HI Less than 3% 0.1 Additional States (as marked on map) 3% to less than 10% 1 VT 2 NH 3 MA 4 RI 10% to less than 20% 0.1 0.5 1.1 0.3 20% or more 5 CT 6 NJ 7 DE 8 MD 9 DC 0.4 2.5 0.3 3.1 0.5

SOURCE: WWW.IBISWORLD.COM

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Products & Markets

The distribution of establishments in the Business Locations Distribution of establishments vs. population Conveyancing Services industry is closely linked to population density in the United 40 States. The service-based nature of conveyancing activities enables operators to leverage region-specific advantages, 30 such as proximity to key markets and

compliance with local legislations. High- % 20 income areas are most likely to have a higher concentration of establishments 10 since real estate purchases are expensive. Based on the US Census Bureau and 0 IBISWorld estimates, the Southeast region West of the United States accounts for 30.2% of Plains Southeast total industry establishments, with 25.7% Southwest Great Lakes Mid-Atlantic of the US population. Of this region, New England

Florida alone accounts for 13.4% of total Establishments Rocky Mountains industry establishments, driven by demand Population from its older and wealthier population. SOURCE: WWW.IBISWORLD.COM The Mid-Atlantic region is densely populated and possesses high Comprising 12.6% of the total concentrations of industry establishments US population, the Southwest at an estimated 18.1% in 2019. region is another major destination Establishment concentration is again in for conveyancing service providers line with its population, as the Mid- and is expected to account for Atlantic accounts for 15.2% of the total US 13.1% of total industry establishments population. New York and Pennsylvania in 2019. The region’s strongest are substantial markets in this region, market is Texas, which is hosting 6.7% and 4.9% of total estimated to contain 8.7% of establishments, respectively. all industry establishments.

Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019 19 Competitive Landscape Market Share Concentration | Key Success Factors | Cost Structure Benchmarks Basis of Competition | Barriers to Entry | Industry Globalization

Market Share The Conveyancing Services industry The level of concentration in this Concentration exhibits a low level of market share industry has increased over the past five concentration, with the industry’s four years. Large operators such as Fidelity largest operators combined accounting National Financial Inc. (FNF) have grown Level for an estimated 29.2% of total industry rapidly due to major acquisitions, organic Concentration in revenue in 2019. Title and escrow growth and technological advancements. this industry is Low  regulations differ from state to state, Therefore, while the overall industry has which makes attaining economies of scale encountered obstacles over the five years on a national level more complicated. As to 2019, FNF has continued to post a result, the industry is highly fragmented strong revenue earnings as it captures a among non-employing entities and other larger share of available title and escrow small-scale operators. However, while services. Over the five years to 2024, non-employers are estimated to account industry concentration is expected to for 65.0% of all industry establishments increase despite the entry of new small in 2019, they account for less than 10% of operators as demand for industry the industry’s total revenue. services continues to grow.

Key Success Factors Ensuring pricing policy is appropriate Having a good reputation As the Conveyancing Services industry is A strong reputation will ensure that a fragmented, demand is local, so prices company’s customer base expands. IBISWorld identifies tend to reflect local and not necessarily 250 Key Success national pricing patterns. Being efficient in labor-intensive services Factors for a This industry is heavily reliant on labor business. The most Must comply with inputs. Developing efficient work important for this government regulations practices will minimize time spent Regulations differ from state to state; a on activities that do not add to the industry are: successful operator will be aware of bottom line. regulatory variances in different regions. Knowledge and understanding Receiving the benefit of word of services available of mouth recommendations This industry offers a wide variety of This industry relies on referrals, so word services. Having a strong knowledge of of mouth recommendations will increase available options will help operators offer revenue for operators. appropriate solutions to clients.

Cost Structure Expenses in the Conveyancing Services Wages Benchmarks industry typically relate to the The largest costs within the preparation of reports, title searches and Conveyancing Services industry are examinations. These operations are labor salaries and commissions. Though intensive, causing wages and commissions are usually paid to title commissions to constitute the bulk of the agencies for insurance services, they also industry’s costs. The cost structures of cover title searches and are therefore a companies in this industry can vary major cost. This is a labor-intensive based on several factors, including industry, with wages expected to account location and downstream markets. for an estimated 30.4% of industry

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Competitive Landscape

Cost Structure revenue in 2019. Moreover, wages have searches and other industry services. Benchmarks declined from 31.7% in 2014 as a share of Other common purchases include office continued total industry revenue over the past five supplies and communication services. years as many operators have implemented software and other Profit technologies to reduce their reliance on Industry profit, measured as earnings labor inputs and improve efficiency. before interest and taxes, is expected to Performance is affected by order volume account for 14.3% of total industry volatility; when volumes and revenue fall, revenue in 2019, down from 17.7% in it becomes difficult for operators to 2014. The profitability of most operators adjust their labor costs in the short term. in the Conveyancing Services industry has been volatile in previous years due to Purchases fluctuating demand from real estate and Purchases are expected to represent 1.2% construction industries. These of industry revenue in 2019. As a downstream markets have since technical industry, operators rely heavily stabilized, resulting in much less volatile on technology and data to remain profit. Recently, the industry has competitive. Service industries also do benefited from this steadier downstream not sell physical goods. As a result, demand, as large companies that have purchases made by industry operators focused more energy on acquisitions have typically include data office stationery, enabled realized synergies and costs processing systems and other software reductions. Furthermore, profit is used by operators to execute title expected to slightly increase in the future

Sector vs. Industry Costs

Average Costs of all Industries in Industry Costs sector (2019) (2019) 100 n P r o fi t 12.4 14.3 n Wages n Purchases 80 n Depreciation n Marketing 30.4 n Rent & Utilities 42.0 n Other 60 1.2 1.1 1.3 4.7 8.6 40 1.1 Percentage of revenue Percentage 3.5 1.3 47.0 20 31.1

0 SOURCE: WWW.IBISWORLD.COM

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Competitive Landscape

Cost Structure as downstream demand for both closings, major companies in this Benchmarks residential and nonresidential industry typically require a large number continued construction expands. of geographically dispersed establishments to maximize revenue. Depreciation Most operators rent the space they work This not a capital-intensive industry, the out of. Operators tend to rent spaces in depreciation of capital assets accounts for prime locations to best appeal to their a relatively small portion of total industry higher income consumer base. This revenue. In 2019, depreciation is causes service industry rent to be expected to account for just 1.1% of relatively more expensive than for industry revenue. manufacturing or wholesaling industries.

Marketing Utilities Over the five years to 2019, marketing Over the five years to 2019, utilities costs have stayed low, it is estimated to costs have remained steady at 0.1% represent 1.3% of total revenue in 2019. of total industry revenue. Utilities This amount is not expected to change include water, electric, internet much due to the mature stage of its access and transportation. industry life cycle. The industry services are already well understood and accepted Other by society. Combined, other costs account for 47.0% of industry revenue is composed of a Rent variety of expenses, including In 2019, IBISWorld estimates that professional fees, courier services, travel expenses on rent will account for 4.6% of expenses, insurance premiums, legal fees, total industry revenue. Due to the cleaning services and other localized nature of title searches and administrative costs.

Basis of Competition Internal competition better positioned to hedge against Competition among participants in the potential losses from such guarantees. Conveyancing Services industry is Competition also occurs based on the Level & Trend primarily based on the relative price of range and quality of services a company Competition in each operator’s services, the quality of provides. Some clients need a broad range this industry is services provided and each operator’s of services beyond conveyancing and Medium and the geographic location. For instance, as a document preparation, such as insurance trend is Steady  result of the falling profit that followed and general legal counsel. As a result, the industry’s recessionary decline, larger companies that operate a variety of industry operators have increasingly insurance, legal and conveyancing employed competitive pricing tactics to divisions internally are at a competitive remain profitable. Guarantees such as advantage in this industry, even if the “No Completion, No Fee”, in which revenue generated through these service users are not charged solicitors’ supplementary activities is not reflected in fees if the sale or purchase falls through, the company’s industry-relevant revenue. have become more common within the Operators also compete based on the industry. However, the ability to brand quality of their services, as developing a services in this way is typically limited to reputation for providing excellent, reliable larger industry operators, as they are service has become essential for operators

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Competitive Landscape

Basis of Competition in the real estate market, where clients External competition continued are often hesitant and skeptical. The primary source of external Internal competition is also based competition for the industry comes on geographic location. Most industry from operators in the Law Firms operators specialize in the transfer of industry (IBISWorld report 54111), houses and commercial properties in which often prepare legal documents their area. These operators benefit from and represent clients involved in substantial location-specific advantages, property transfers. However, outside such as a better understanding of the competition from law firms is generally region’s laws and real estate regulations. limited by the specialized and niche As a result, the industry is highly nature of the services provided by the fragmented and geographically Conveyancing Services industry. dispersed, and the majority of industry Additionally, industry operators establishments are non-employers. compete with players in the However, larger players tend to Property, Casualty and Direct cluster near major real estate markets, Insurance industry (IBISWorld generating intense internal competition report 52412) that provide escrow in regions such as the Mid-Atlantic. services and insurance policies.

Barriers to Entry An operator hoping to enter the Conveyancing Services industry must be Barriers to Entry checklist Level & Trend familiar with the regulatory environment Competition Medium of the state in which it plans to operate. Barriers to Entry Concentration Low New industry participants must keep up in this industry are Life Cycle Stage Mature to speed with all government regulations Capital Intensity Low Low and Steady  and disclosures so that fraud and Technology Change Low unnecessary settlement costs are avoided Regulation and Policy Heavy when transferring a title from one party Industry Assistance Low

to another. However, while regulations and other legal requirements serve as a SOURCE: WWW.IBISWORLD.COM moderate barrier to entry for industry operators, these regulations have also commercial properties often require caused the market to become highly conveyancing companies with greater fragmented among a multitude of small scale to meet their needs. As a result, companies. Complex regulations that smaller operators seeking to enter this vary from state to state make it difficult industry will likely be limited to servicing for large companies to expand their individual consumers and small and operations across the entire country. New medium enterprises. entrants would experience limited This industry is not capital intensive competition from major players that and significant start-up capital is not dominate the industry. required. As a result, capital expenditure However, some clients require an on technology and systems does not operator with specialized knowledge and present a significant barrier to entry. substantial resources, which acts as a However, while a new competitor in the barrier to success for certain small-scale market may not encounter significant operators. For example, large corporate financial obstacles, success can be clients engaged in the transfer of various hampered by a lack of brand recognition,

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Competitive Landscape

Barriers to Entry technology and software knowledge and having a reputation of excellence and continued reputation. As many consumers and integrity has become an increasingly corporations have become more skeptical important prerequisite for obtaining of the real estate market in recent years, work as a conveyancer.

Industry The Conveyancing Services industry revenue came from international Globalization primarily serves the US domestic operations in 2019. Moreover, each market. For example, while First of the industry’s four largest players Level & Trend American Financial Corporation offers are domestically listed and majority- services either directly or through joint owned by US shareholders. As a Globalization in this ventures in over 70 countries, only 6.2% result, the industry exhibits a low industry is Low and of the company’s industry-relevant level of globalization. the trend is Steady 

Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019 24 Major Companies Fidelity National Financial Inc. | First American Financial Corporation Stewart Information Services Corporation | Other Companies

Major Players (Market Share) First American Financial Corporation 10.1% 73.2% Other

Stewart Information Services Corporation 3.9%

Fidelity National Financial Inc. 12.8% SOURCE: WWW.IBISWORLD.COM

Player Performance Fidelity National Financial Inc. (FNF) offers insurance, escrow and other is a provider of claims management, title-related services including trustee information services and title and sales guarantees, trust activities, Fidelity National specialty insurance. FNF is one of the recordings and reconveyances and Financial Inc. nation’s largest providers of title home warranty and products. While Market Share: 12.8% insurance policies. The company’s FNF generates most of its revenue Industry Brand Names  title insurance underwriters include through the provision of title insurance Fidelity National Title Fidelity National Title, Chicago Title, services, revenue from title insurance Chicago Title Commonwealth Land Title, Lawyers operations is not applicable to the Commonwealth Land Title, Ticor Title and Alamo Title. Conveyancing Services industry. Title Operating through a variety of Many services contributing to industry Alamo Title underwriters, the company distributes its revenue are provided in conjunction products through its 1,400 residential with title insurance. title offices, relying on more than 5,200 Over the five years to 2019, FNF has independent agents nationwide. FNF’s made several major acquisitions to subsidiaries also provide information increase its presence across various services and software to the financial industries. In 2017, for example, FNF services and real estate markets. In 2018, acquired a 90.0% share of Title Guaranty FNF generated $7.6 billion in total of Hawaii, Hawaii’s oldest provider of revenue (latest data available). title and escrow services, for $98.0 FNF operates in two segments: title; million. Most recently, FNF is attempting corporate and other. The title segment to acquire one of its largest competitors,

Fidelity National Financial Inc. (US industry-specifi c segment) - fi nancial performance* Revenue Operating Income Year ($ million) (% change) ($ million) (% change) 2014 1,855 6.8 138.3 -28.6 2015 2,246 21.1 259.5 87.6 2016 2,416 7.6 331.3 27.7 2017 2,637 9.1 297.3 -10.3 2018 2,615 -0.8 258.3 -13.1 2019 2,259.56 -13.6 210.8 -18.4

*Estimates SOURCE: ANNUAL REPORT AND IBISWORLD

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Major Companies

Player Performance Stewart Information Services achieved through acquisitions. As an continued Corporation, for $1.2 billion, pending example, revenue grew a substantial approval by the New York Department of 21.1% in 2015 alone due to an increase in Financial Services. This deal is expected downstream markets. More recently, the to close by the end of 2019 and create company’s industry-relevant revenue has operational efficiencies to save costs for increased at a relatively modest pace as both companies. the value of existing home sales and the total value of US construction activity Financial performance have experienced slowed but stable Over the five years to 2019, FNF’s growth. In addition, FNF has also industry-relevant revenue is estimated to benefited from relatively strong profit in increase at an annualized rate of 4.0% to recent years, with the company’s $2.3 billion. While growth is primarily industry-relevant operating income driven by surges in downstream projected to increase at an annualized construction and housing markets, a rate of 8.8% to $210.8 million over the portion of this growth has also been five years to 2019.

Player Performance First American Financial Corporation creating two entirely new companies. (FAF) was incorporated in 2010 to serve Currently, FAF specializes in insurance as the holding company for the First and settlement services, while the First American American Corporation’s financial services company’s property information and Financial business. The company has a history analytics businesses are managed by Corporation dating back to 1894, when two entities CoreLogic Inc. In 2018, FAF employed Market Share: 10.1% were merged to become the Orange more than 18,251 workers and generated County Title Company. This enterprise total revenue of $5.7 billion (latest was then renamed First American Title data available). Insurance in 1960, as operations FAF operates in the Conveyancing expanded beyond Orange County. In Services industry through its title 2010, the company separated its real insurance and services segment, which estate and title insurance operations, is involved in providing title insurance

First American Financial Corporation (US industry-specifi c segment) - fi nancial performance* Revenue Operating Income Year ($ million) (% change) ($ million) (% change) 2014 1,627.7 -5.7 141.1 7.6 2015 1,805.7 10.9 184.8 31 2016 1,886.2 4.5 220 19 2017 1,915 1.5 232.4 5.6 2018 1,937.1 1.2 240.2 3.3 2019 1,786.8 -7.8 246.7 2.7

*Estimates SOURCE: ANNUAL REPORT AND IBISWORLD

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Major Companies

Player Performance policies on residential and commercial $115.3 million, respectively, on continued property. In 2018, this segment acquisitions, specifically to strengthen its accounted for an estimated 91.9% of total title insurance and services segment. company revenue (latest data available). While title insurance policies are not Financial performance included in the scope of the FAF’s industry-relevant revenue is Conveyancing Services industry, revenue projected to increase at an annualized generated from closing and escrow rate of 1.9% over the five years to 2019, services is included. Additionally, FAF reaching $1.8 billion in 2019. Revenue offers tax-deferred exchanges of real for the company’s title and insurance estate, maintenance and management of services segment declined in 2014, as title plant records and images, in addition a drop in the sale of existing homes led to banking, trust and investment advisory to a decrease in demand for industry services. The company also operates services. However, FAF was quick to internationally, though revenue derived recover, as the company’s industry- from international operations accounted relevant revenue has grown in each for just 5.6% of this segment’s revenue in subsequent year. Furthermore, the 2018 (latest data available). company has also benefited from Over the five years to 2019, FAF has increased profit in recent years, with made several acquisitions to increase its FAF’s industry-relevant operating income assets and expand its reach across several estimated to grow at an annualized rate industries. In both 2016 and 2017, FAF of 11.8% to $246.7 million over the five spent an aggregate $91.1 million and years to 2019.

Player Performance Stewart Information Services than 80 countries. Services are offered to Corporation (Stewart) is a leading title home buyers and sellers; residential and insurance and real estate service provider commercial real estate professionals; and Stewart in the United States. The company is mortgage lenders and servicers. Stewart Information based in Houston and employs an also maintains operations in Canada, the Services estimated 5,960 employees across more United Kingdom, Central Europe, Central Corporation Market Share: 3.9% Stewart Information Services Corporation (US industry-specifi c segment) - fi nancial performance* Revenue Operating Income Year ($ million) (% change) ($ million) (% change) 2014 756.7 5.5 21.0 -44.1 2015 849.5 12.3 36.9 75.7 2016 842.0 -0.9 36.9 0.0 2017 804.8 -4.4 30.9 -16.3 2018 780.9 -3.0 30.0 -4.0 2019 680.0 -12.9 17.51 -41.0

*Estimates SOURCE: ANNUAL REPORT AND IBISWORLD

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Major Companies

Player Performance America and Australia. In 2018, the insurance giant, permitting the combined continued company generated $1.9 billion in total company to benefit from significant revenue (latest data available). market share and expanded profit. Stewart operates through two major Financial performance segments: title insurance and related Over the five years to 2019, Stewart’s services and ancillary services and industry-relevant operations have corporate. The company participates in experienced stable growth early during the Conveyancing Services industry the period; however, the company has through its title insurance and related contended with revenue declines after services segment, which specializes in 2016. Early growth can be attributed to examining titles to determine the significant acquisition activity. More ownership of the property being recently, a sharp decline in the number of transferred, understanding the scope of a closed orders, primarily in refinancing particular policy’s coverage and ascertain and commercial orders, is projected to if any debts are owed. This is also the cause the company’s direct title revenue company’s largest operational segment. to decline after 2016. Overall, Stewart’s Stewart’s remaining operations primarily industry-relevant revenue is expected to involve assisting with loss mitigation and decrease at an annualized rate of 2.1% to providing post-closing services to $680.0 million over the five years to residential mortgage lenders. 2019. Due to significant volatility in In March 2018, Fidelity National Stewart’s industry-relevant operating Financial Inc. (FNF) announced it was income, profit has fluctuated set to purchase Stewart for $1.2 billion. substantially. The overall decrease in The deal is expected to close by the end of earnings has been driven by increased 2019, pending the approval by the New employee costs, a lower agency York Department of Financial Services. remittance rate and higher title loss However, if the acquisition is not expenses as a percent of title revenue. completed because of regulation failures, Over the five years to 2019, it is FNF will pay Stewart a reverse break-up estimated that operating income fee of an estimated $50.0 million. The will decrease at an annualized rate acquisition is expected to create a title of 3.5% to $17.5 million.

Other Company Old Republic International Corporation insurance), the title insurance group Performance (Old Republic) is a provider of insurance and the republic financial indemnity underwriting in the United States. The group (mortgage guaranty and consumer company was founded in 1923 and is credit indemnity). The company Old Republic currently headquartered in Chicago. Old participates in the Conveyancing Services International Republic provides general insurance for industry through its title insurance Corporation automobiles, aviation and both group. This segment’s business involves Market Share: 2.4% residential and commercial buildings. In the issuing of policies to real estate 2018, the company employed an purchasers and investors based on estimated 9,000 individuals and searches of public records. Policies are generated $6.0 billion in total revenue then insured against losses from defects, (latest data available). liens and other problems with the Old Republic operates through three insured title. In 2019, Old Republic major segments including the general is projected to earn $421.1 million in insurance group (property and liability industry-relevant revenue.

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Capital Intensity The Conveyancing Services industry is highly labor intensive, as the majority of Capital Intensity work involves employees conducting title Capital units per labor unit Level searches, preparing documentation, 0.5 The level of capital liaising with clients and meeting with intensity is Low  representatives of various parties. 0.4 Moreover, there are no significant 0.3 capital investments that an operator must make to be competitive, and 0.2 industry-relevant capital expenditures 0.1 are generally limited to software, data 0.0 processing systems and personal Economy Professional, Conveyancing computers. As a result, the typical Scientific and Services Technical Services industry operator is expected to spend Dotted line shows a high level of capital intensity just $0.04 on capital investments for SOURCE: WWW.IBISWORLD.COM every dollar spent on labor in 2019. Over the five years to 2024, the industry software and more advanced technologies will rely more heavily on capital as to complete jobs. However, the ratio of operators increasingly use computer labor to capital will likely remain steady

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Operating Conditions

Capital Intensity at 2019 values in coming years, as it is continued unlikely that this industry will ever have high capital investment requirements.

Technology and The Conveyancing Services industry At the same time, the increased Systems exhibits a low level of technology number of services available online could change. The only major technological signal a shift away from the industry’s Level change that has occurred within the traditional reliance on manual labor, Conveyancing Services industry in recent especially as major players cut down staff The level of years has been the proliferation of online levels in response to substantial volatility technology title searches. For example, First in the US housing market. For instance, change is Low  American Financial Corporation’s FAST Stewart Information Services Transaction System centralizes company Corporation has invested in internet- operations by providing an internet- based technology, which enables based search. Most of the technology customers to interact directly with its used by industry operators comes in the SureClose and AIM title production form of data processing software and systems. Before such technology existed, communication equipment. Given that multiple employees were required to this industry has a low level of capital search for a title, review the documents intensity, it is unlikely that innovation in and create a policy. Innovations such these technologies will radically alter the as these could help lower labor intensity industry landscape operationally over the and increase operational efficiency five years to 2024. moving forward.

Revenue Volatility The Conveyancing Services industry has and rising levels of construction activity. exhibited a moderate level of revenue Over the five years to 2024, industry volatility over the five years to 2019. revenue is expected to grow more Level Industry revenue is highly sensitive to smoothly as the number of existing The level of volatility changes in the US housing market, with home sales and housing starts are is Medium  most industry operators experiencing projected to experience consistent strong demand for conveyancing services growth, at annualized rates of 0.9% during periods of high home ownership and 2.5%, respectively.

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Operating Conditions

Revenue Volatility continued

Regulation and Policy Regulations in the Conveyancing Services Real Estate Settlement industry differ among states, depending Procedures Act (1975) on local legal requirements and historical This act was introduced to improve the Level & Trend practice. This has fragmented the regulatory environment for the real estate The level of industry somewhat, as many players industry, primarily to protect consumers Regulation is are forced to operate several small with regard to settlement fees and costs. Heavy and the independent offices across the country The purpose of the Real Estate Settlement trend is Steady  that can adhere to each state’s particular Procedures Act is to eliminate kickbacks legal code. This structure makes it and referral fees that unnecessarily more difficult for major players to increase the cost of certain settlement benefit from economies of scale and services. It aims to accomplish this by capture significant market share. providing consumers with the relevant In the case of property transfers disclosure throughout the closing process. (conveyancing), an attorney or licensed For instance, Section 8 of the act prohibits escrow agent represents each buyer, a person from giving or accepting anything seller and mortgage holder involved in of value for referrals of settlement service the deal. In passing papers, legal related to a federally related mortgage loan. representatives affect the transaction on It also prohibits a person from giving or behalf of their clients. Each state has accepting any part of a charge for services different rules for how this deal must be that are not performed. affected; for example, not all states require every party to be present HUD-1 Settlement Statement simultaneously. In most states, an offer is The HUD-1 Settlement Statement is a made in the form of a written contract standard form that clearly shows all (bound with a deposit on the purchase charges imposed on borrowers and sellers price) that sets out the instances in which in connection with the settlement. The Real an offer can be withdrawn without Estate Settlement Procedures Act enables forfeiting the deposit. Upon meeting the borrower to request to see the HUD-1 these conditions, the buyer is granted Settlement Statement one day before the equitable title. actual settlement. The settlement agent

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Operating Conditions

Regulation and Policy must then provide the borrowers with a land acquisitions made by the continued completed HUD-1 Settlement Statement US government, including based on information known to the agent acquisitions made by exchange, at that time. direct purchase, donation and condemnation. Title Standards Title Standards 2001 2001 is used in every state except The Title Standards act as a guide for Texas, which has a more rigid the preparation of title evidence for all regulatory environment.

Industry Assistance Operators in the Conveyancing Services relationship. These guidelines aim industry receive no formal government to support companies that provide assistance. However, as industry materials and services for the creation Level & Trend operators are often legal practitioners, of legal documents that are intended The level of they do receive some support from legal to express or affect legal rights, Industry Assistance associations such as the American Bar obligations, claims or positions. is Low and the Association (ABA). Founded in 1878, the These recent guidelines supplement trend is Steady  ABA is a voluntary bar association of over the Best Practice Guidelines for Legal 400,000 member lawyers and law Information Website Providers, which students, which is not specific to any describe general best practices within jurisdiction in the United States. the industry, including keeping clients In 2012, the ABA released the Best informed about the times and dates when Practice Guidelines for Legal Document important documents are reviewed and Service Providers, which outlines best the jurisdiction of those documents, in practices for individuals and entities that addition to the relevant terms and operate outside the lawyer-client conditions of use.

Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019 32 Key Statistics

Industry Data Industry Existing Revenue Value Added Establish- Wages Domestic house sales ($m) ($m) ments Enterprises Employment Exports Imports ($m) Demand (Mil) 2010 14,112.5 6,501.1 30,569 28,025 96,406 -- -- 4,384.2 N/A 4.2 2011 13,422.6 6,367.9 30,237 27,743 93,120 -- -- 4,341.0 N/A 4.3 2012 15,487.3 7,712.9 33,576 30,801 111,526 -- -- 5,467.2 N/A 4.7 2013 16,747.6 8,694.7 34,916 32,690 119,049 -- -- 5,914.7 N/A 5.1 2014 15,398.0 7,776.9 33,710 31,049 99,786 -- -- 4,882.0 N/A 4.9 2015 16,253.5 7,426.5 35,329 32,772 100,743 -- -- 5,021.0 N/A 5.3 2016 16,802.0 8,255.9 35,986 33,393 103,705 -- -- 5,080.4 N/A 5.5 2017 17,270.0 7,895.0 37,033 34,364 106,500 -- -- 5,218.2 N/A 5.5 2018 17,487.1 8,016.5 37,857 35,157 108,188 -- -- 5,297.5 N/A 5.3 2019 17,658.5 8,100.6 38,764 36,040 109,915 -- -- 5,375.5 N/A 5.4 2020 17,766.2 8,150.1 39,348 36,612 110,660 -- -- 5,411.2 N/A 5.5 2021 17,933.3 8,221.7 39,909 37,143 111,418 -- -- 5,451.1 N/A 5.5 2022 18,198.7 8,347.5 40,731 37,928 113,221 -- -- 5,537.8 N/A 5.6 2023 18,445.4 8,467.9 41,453 38,614 114,926 -- -- 5,619.5 N/A 5.6 2024 18,645.6 8,560.7 42,141 39,272 116,396 -- -- 5,689.2 N/A 5.7 Sector Rank 17/35 18/35 23/35 23/35 21/35 N/A N/A 18/35 N/A N/A Economy Rank 408/694 290/694 171/694 160/694 283/694 N/A N/A 274/694 N/A N/A

Annual Change Industry Establish- Domestic Existing Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand house sales (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) 2011 -4.9 -2.0 -1.1 -1.0 -3.4 N/A N/A -1.0 N/A 2.4 2012 15.4 21.1 11.0 11.0 19.8 N/A N/A 25.9 N/A 9.3 2013 8.1 12.7 4.0 6.1 6.7 N/A N/A 8.2 N/A 8.5 2014 -8.1 -10.6 -3.5 -5.0 -16.2 N/A N/A -17.5 N/A -3.9 2015 5.6 -4.5 4.8 5.5 1.0 N/A N/A 2.8 N/A 8.2 2016 3.4 11.2 1.9 1.9 2.9 N/A N/A 1.2 N/A 3.8 2017 2.8 -4.4 2.9 2.9 2.7 N/A N/A 2.7 N/A 0.0 2018 1.3 1.5 2.2 2.3 1.6 N/A N/A 1.5 N/A -3.6 2019 1.0 1.0 2.4 2.5 1.6 N/A N/A 1.5 N/A 1.9 2020 0.6 0.6 1.5 1.6 0.7 N/A N/A 0.7 N/A 1.9 2021 0.9 0.9 1.4 1.5 0.7 N/A N/A 0.7 N/A 0.0 2022 1.5 1.5 2.1 2.1 1.6 N/A N/A 1.6 N/A 1.8 2023 1.4 1.4 1.8 1.8 1.5 N/A N/A 1.5 N/A 0.0 2024 1.1 1.1 1.7 1.7 1.3 N/A N/A 1.2 N/A 1.8 Sector Rank 31/35 31/35 14/35 13/35 28/35 N/A N/A 29/35 N/A N/A Economy Rank 427/694 445/694 155/694 139/694 303/694 N/A N/A 340/694 N/A N/A

Key Ratios Imports/ Exports/ Revenue per Share of the IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy (%) (%) (%) ($’000) (%) per Est. ($) (%) 2010 46.07 N/A N/A 146.39 31.07 3.15 45,476.42 0.04 2011 47.44 N/A N/A 144.14 32.34 3.08 46,617.27 0.04 2012 49.80 N/A N/A 138.87 35.30 3.32 49,021.75 0.05 2013 51.92 N/A N/A 140.68 35.32 3.41 49,682.90 0.05 2014 50.51 N/A N/A 154.31 31.71 2.96 48,924.70 0.05 2015 45.69 N/A N/A 161.34 30.89 2.85 49,839.69 0.04 2016 49.14 N/A N/A 162.02 30.24 2.88 48,988.96 0.05 2017 45.72 N/A N/A 162.16 30.22 2.88 48,997.18 0.04 2018 45.84 N/A N/A 161.64 30.29 2.86 48,965.69 0.04 2019 45.87 N/A N/A 160.66 30.44 2.84 48,905.97 0.04 2020 45.87 N/A N/A 160.55 30.46 2.81 48,899.33 0.04 2021 45.85 N/A N/A 160.96 30.40 2.79 48,924.77 0.04 2022 45.87 N/A N/A 160.74 30.43 2.78 48,911.42 0.04 2023 45.91 N/A N/A 160.50 30.47 2.77 48,896.68 0.04 2024 45.91 N/A N/A 160.19 30.51 2.76 48,877.97 0.04 Sector Rank 22/35 N/A N/A 18/35 27/35 18/35 23/35 18/35 Economy Rank 165/694 N/A N/A 486/694 159/694 567/694 397/694 290/694

Figures are in inflation-adjusted 2019 dollars. Rank refers to 2019 data. SOURCE: WWW.IBISWORLD.COM Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019 33

Industry Financial Ratios Apr 2017 - Mar 2018 by company revenue Apr 2014 - Apr 2015 - Apr 2016 - Apr 2017 - Small Medium Large Mar 2015 Mar 2016 Mar 2017 Mar 2018 (<$10m) ($10-50m) (>$50m)

Liquidity Ratios Current Ratio 2.2 1.3 1.5 1.6 1.4 2.0 1.2 Quick Ratio 1.8 1.2 1.4 1.3 1.4 1.7 1.0 Sales / Receivables (Trade Receivables Turnover) 10.4 22.3 25.2 38.2 262.9 46.4 10.7 Days’ Receivables 35.1 16.4 14.5 9.6 1.4 7.9 34.1 Cost of Sales / Inventory (Inventory Turnover) n/c n/c n/c n/c n/c n/c n/c Days’ Inventory n/a n/a 0.4 0.4 0.4 0.4 0.4 Cost of Sales / Payables (Payables Turnover) 17.3 22.0 20.5 18.3 40.5 14.8 11.1 Days’ Payables 21.1 16.6 17.8 19.9 9.0 24.7 32.9 Sales / Working Capital 9.7 26.7 16.0 17.2 32.6 8.9 47.1

Coverage Ratios Earnings Before Interest & Taxes (EBIT) / Interest 19.7 10.2 14.0 15.0 12.7 49.7 1.9 Net Profit + Dep., Depletion, Amort. / Current Maturities LT Debt n/a n/a n/a n/a n/a n/a n/a

Leverage Ratios Fixed Assets / Net Worth 0.3 0.6 0.5 0.4 0.3 0.2 -0.3 Debt / Net Worth 1.5 3.6 1.9 2.6 1.9 1.2 -1.9 Tangible Net Worth 20.9 18.4 16.6 24.5 32.1 34.1 -8.2

Operating Ratios Profit before Taxes / Net Worth, % 53.0 34.7 48.0 44.6 45.9 43.5 n/a Profit before Taxes / Total Assets, % 13.3 12.8 15.9 20.3 22.6 20.4 4.0 Sales / Net Fixed Assets 36.0 48.3 41.8 54.5 119.8 77.6 24.4 Sales / Total Assets (Asset Turnover) 2.1 3.0 2.9 3.1 3.2 3.3 0.7

Cash Flow & Debt Service Ratios (% of sales) Cash from Trading 74.5 67.8 61.7 67.9 61.3 71.2 n/a Cash after Operations 12.5 8.9 8.7 9.7 6.4 10.2 n/a Net Cash after Operations 9.7 6.7 6.5 9.4 10.5 7.4 n/a Cash after Debt Amortization 1.6 1.0 3.1 2.5 2.8 2.3 n/a Debt Service P&I Coverage 5.7 2.3 4.6 8.4 7.9 29.7 n/a Interest Coverage (Operating Cash) 13.7 8.3 10.2 20.4 18.2 28.1 n/a

Assets, % Cash & Equivalents 23.8 25.4 26.8 28.5 28.3 35.3 16.3 Trade Receivables (net) 25.9 23.1 22.0 16.4 15.0 20.1 12.6 Inventory 1.2 1.4 0.5 0.2 0.3 n/a 0.1 All Other Current Assets 9.2 4.0 6.0 9.2 13.2 8.2 3.2 Total Current Assets 60.2 53.9 55.3 54.3 56.9 63.6 32.2 Fixed Assets (net) 13.5 14.7 16.7 12.5 18.2 7.0 11.1 Intangibles (net) 12.9 12.2 14.4 18.1 14.4 10.8 38.7 All Other Non-Current Assets 13.4 19.3 13.6 15.1 10.4 18.6 18.0 Total Assets 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Total Assets ($m) 1,153.7 1,134.4 1,369.5 1,286.5 43.7 189.0 1,053.8

Liabilities, % Notes Payable-Short Term 8.8 6.1 7.5 7.3 15.3 2.0 0.9 Current Maturities L/T/D 1.5 2.4 2.2 2.4 0.9 3.8 2.7 Trade Payables 6.5 9.2 7.7 7.9 9.2 7.6 5.8 Income Taxes Payable n/a 0.5 0.2 0.1 0.3 n/a n/a All Other Current Liabilities 16.7 30.1 17.2 18.2 14.1 25.5 12.9 Total Current Liabilities 33.5 48.2 34.9 35.9 39.8 39.0 22.3 Long Term Debt 15.0 11.6 24.6 17.8 13.1 13.8 34.2 Deferred Taxes 0.6 0.4 0.1 n/a n/a 0.1 n/a All Other Non-Current Liabilities 17.1 9.2 9.4 3.8 0.5 2.3 12.9 Net Worth 33.8 30.6 31.0 42.6 46.5 44.9 30.5 Total Liabilities & Net Worth ($m) 1,153.7 1,134.4 1,369.5 1,286.5 43.7 189.0 1,053.8

Maximum Number of Statements Used 52 58 59 53 22 20 11

Source: RMA Annual Statement Studies, rmahq.org. RMA data for all industries is derived directly from more than 260,000 statements of member financial institutions’ borrowers and prospects. Note: For a full description of the ratios refer to the Key Statistics chapter online.

Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Conveyancing Services in the US July 2019 34

Jargon & Glossary

Industry Jargon CLOSING The final stages in the transfer of property. HOUSING STARTS The number of new homes under CONVEYANCING The act or business of transferring construction. land or property from one party to another.

IBISWorld Glossary BARRIERS TO ENTRY High barriers to entry mean that INDUSTRY REVENUE The total sales of industry goods new companies struggle to enter an industry, while low and services (exclusive of excise and sales tax); subsidies barriers mean it is easy for new companies to enter an on production; all other operating income from outside industry. the firm (such as commission income, repair and service CAPITAL INTENSITY Compares the amount of money income, and rent, leasing and hiring income); and spent on capital (plant, machinery and equipment) with capital work done by rental or lease. Receipts from that spent on labor. IBISWorld uses the ratio of interest royalties, dividends and the sale of fixed depreciation to wages as a proxy for capital intensity. tangible assets are excluded. High capital intensity is more than $0.333 of capital to INDUSTRY VALUE ADDED (IVA) The market value of $1 of labor; medium is $0.125 to $0.333 of capital to $1 goods and services produced by the industry minus the of labor; low is less than $0.125 of capital for every $1 of cost of goods and services used in production. IVA is labor. also described as the industry’s contribution to GDP, or CONSTANT PRICES The dollar figures in the Key profit plus wages and depreciation. Statistics table, including forecasts, are adjusted for INTERNATIONAL TRADE The level of international inflation using the current year (i.e. year published) as trade is determined by ratios of exports to revenue and the base year. This removes the impact of changes in imports to domestic demand. For exports/revenue: low is the purchasing power of the dollar, leaving only the less than 5%, medium is 5% to 20%, and high is more “real” growth or decline in industry metrics. The inflation than 20%. Imports/domestic demand: low is less than adjustments in IBISWorld’s reports are made using the 5%, medium is 5% to 35%, and high is more than US Bureau of Economic Analysis’ implicit GDP price 35%. deflator. LIFE CYCLE All industries go through periods of growth, DOMESTIC DEMAND Spending on industry goods and maturity and decline. IBISWorld determines an services within the United States, regardless of their industry’s life cycle by considering its growth rate country of origin. It is derived by adding imports to (measured by IVA) compared with GDP; the growth rate industry revenue, and then subtracting exports. of the number of establishments; the amount of change EMPLOYMENT The number of permanent, part-time, the industry’s products are undergoing; the rate of temporary and seasonal employees, working proprietors, technological change; and the level of customer partners, managers and executives within the industry. acceptance of industry products and services. ENTERPRISE A division that is separately managed and NONEMPLOYING ESTABLISHMENT Businesses with keeps management accounts. Each enterprise consists no paid employment or payroll, also known as of one or more establishments that are under common nonemployers. These are mostly set up by self-employed ownership or control. individuals. ESTABLISHMENT The smallest type of accounting unit PROFIT IBISWorld uses earnings before interest and tax within an enterprise, an establishment is a single (EBIT) as an indicator of a company’s profitability. It is physical location where business is conducted or where calculated as revenue minus expenses, excluding services or industrial operations are performed. Multiple interest and tax. establishments under common control make up an VOLATILITY The level of volatility is determined by enterprise. averaging the absolute change in revenue in each of the EXPORTS Total value of industry goods and services sold past five years. Volatility levels: very high is more than by US companies to customers abroad. ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than IMPORTS Total value of industry goods and services ±3%. brought in from foreign countries to be sold in the United States. WAGES The gross total wages and salaries of all employees in the industry. The cost of benefits is also INDUSTRY CONCENTRATION An indicator of the included in this figure. dominance of the top four players in an industry. Concentration is considered high if the top players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less than 40%.

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