Redfin has certainly made it clear that it wants to transform the real estate business — initially focusing on the way people buy and sell homes. Now, the Seattle company is branching off in a new direction.
Redfin recently established a new subsidiary called Title Forward that plans to offer both title and escrow services to homebuyers, GeekWire has learned. Based in Philadelphia, the new unit is operating under the direction of Redfin vice president of analytics and new business Adam Wiener. It is currently offering service in Colorado, Georgia, Illinois, Massachusetts, Maryland, New York, Pennsylvania, Washington D.C. and Virginia.
“Redfin’s long-term goal is to change the whole real estate game, which goes beyond purchase or sale to include all the services people need throughout,” said Redfin spokeswoman Jani Strand. “Title Forward is focused on making the closing process as stress-free as possible, through both advocacy and technology. We want to get customers the right policy at the right price, written in plain language, not title-ease.”
Title Forward is not an underwriter, operating instead as the title agent. To handle the underwriting, the unit is partnering with First American, one of the behemoths of the industry with revenues last year of $4.5 billion.
The move is interesting in that it signals Redfin’s desire to own a good chunk of the real estate transaction — a tactic used by other large real estate companies. It also indicates that Redfin — which raised $14 million in funding from Madrona, Greylock, Vulcan and others in 2011— sees opportunity to bring its customer-centric approach to the title and escrow process.
Redfin also could benefit by having its agents utilize the in-house title and escrow services, making that more of a profit center for the company. It’s unclear whether other real estate companies would be able to use Title Forward, or if they’d want to given that Redfin is a competitor. UPDATE: Strand says that the service will be made available to other brokerages.
The title insurance business is highly regulated, one of the main reasons that Redfin decided to establish Title Forward as a subsidiary. But those regulations also make it a tough business.
Strand said that they think Title Forward can still make a mark in the industry by applying Redfin’s technology and advocacy expertise — “making the closing process easier, clearer, more efficient.”