Kicking Off 2020 – January 15th, 2020

Issue Six

What’s the future for small businesses in Real Estate?

I’ve been thinking a lot lately about the special place the small business has in the mortgage and real estate industry. I’m willing to bet that ours is one of the few industries in America where a closely-held, private business really can grow to become a marketplace power. But it goes further than that.

Many of the functions and specialties required over the course of a home purchase (or refinance) are still often fulfilled by small and even one-person businesses. Unlike a good number of other industries, the larger players don’t always find it beneficial to swallow up these functions themselves. So we still have small abstractors, title agents, mortgage brokerages, appraisers, community lenders and, of course, REALTORS, playing a vital role in most mortgage transactions. Because of the skill and local knowledge often required of these positions, not to mention the tangled web of regulation and law governing them, it doesn’t always make sense for a large lender or title underwriter to offer all of these services in all markets. Thus, the “mom-and-pop” shop continues to thrive.

And yet, these small businesses have to be resilient. Some, like independent loan originators, community banks or REALTORS, can leverage their understanding of local markets (along with the corresponding customs, people and laws) as trusted advisors to the consumer. But others—such as title agents, appraisers and abstractors—function in a mostly business-to-business environment. All of them need to be flexible, resilient and effective to stay alive. And that’s just for starters. To position themselves favorably, these service providers also need to provide value to their clients in other ways. For a while, it was quite popular on the settlement services side to position one’s firm as a de facto compliance specialist of sorts (especially with the onset of TRID). Many times, the specialized knowledge of the local market (especially in remote or unusual venues) is enough to demonstrate time and cost savings.
Whatever keeps them going, small mortgage-related businesses continue to be a major cog in our industry and even economy. We could learn a thing or two from them. After all, we frequently hear how volatile the past few years have been (and next few will be). As some of the larger players struggle to change course, repeatedly, to keep up with the changing market; small businesses have been doing this as a matter of course for years. While some of the larger players are challenged by adapting their own workflows to changing or disparate technologies; smaller players have done this on a daily basis for decades.

We’ll talk more about this in the coming weeks and months. For now, suffice it to say, the survival and success of the small mortgage-related business is one of the many things that make ours a unique industry. Maybe it’s time for more of us to adopt some of their ways as the waves of change continue.

Until Next Week,


P.S. I am looking for contributors! Would you like to be featured in an upcoming LodeStar report? If so please contact me at

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