How to Work ON Your Title Agency, Not IN It | Episode 22

Make sure you understand why you want to change and if you want to change. Do you want to do it because you have to do it? Or do you want to do it because you are excited about it? If you're doing it because you have to do it, you're not excited about it. In a world where change is the only constant, Mo Shamil stands at the forefront, guiding title professionals to not just grow their businesses, but to master the art of innovation.

With every episode, you're handed the keys to unlock unparalleled growth and stay ahead of the curve. Get ready for a transformative journey. Hello everyone, and welcome to the Technology Agents Podcast. I am your host, Mo Shamil, CEO of Alltech National Title. Today, I'm really excited to have Ethan Pausner, a VP of technology and market development at Fidelity.

We'll explore strategies for working on your business, not in it, leveraging technology and implementing lean practices for growth. Get ready for an insightful conversation packed with practical tips for your agency. Welcome, Ethan. Thank you, Mo. Pleasure to be here.

How are you? I always like to welcome the guests and have the guests give us a little background on your career and your path, how you got into here with Fidelity. Sure. Thank you. I've always was interested in real estate.

And when I was in law school, I focused on real estate law classes. Where did you go to law school? University of Michigan. Wolves. Wolverine.

Wolverine. I grew up in Ann Arbor for those who like Ann Arbor. Then after law school, I was going to work for a local real estate developer who was an attorney turned developer, but then he had some financial reversals. So I ended up working for a circuit court on the west side of the state as a law clerk and a bailiff. So I met my wife.

We're still married 40 years later. And, uh, from that job, it's been all over the place, but I work in Pittsburgh for a real estate syndicator. And then from there got my first real long-term real estate job. I worked for Hardee's restaurants in North Carolina, first in their corporate real estate development department, and then in their legal apartment, and that's where it became, I would say a pretty good at one acre out parcel development process. From there, we decided to move back home to Michigan and I worked for a private practice real estate boutique firm.

And that's where I discovered I didn't like billblowers, especially drafting easements and condo docks. So I took a job with a title insurance agency at 25 offices. They wanted a commercial operation. So I opened a commercial office for them, uh, met a bunch of people, did that for about three years, but I wasn't really what I was looking for. And I tried some off the wall.

I became an industrial warehouse leasing agent. That's where I learned door-to-door sales, going to machine tool shops. And, uh, I would tell people I wore out the ignition switch on my car, just going in and out, trying to drum up business for these 250,000 square foot warehouses, um, from there though, I went back to practicing law solo though. Shared an office with a business attorney. And then through connections I've made in the title business and the legal business, I got hooked into a Chicago title where I've been ever since then going on my 26th year.

That's awesome. So you've had various roles within the throttle industry. How did those experiences shape your approach to market development and technology? Fidelity, I started out as an agency rep in the days when it was all about personal relationships with the title agency. So the underwriter agency rep, your job was to keep the agency owner happy so they send you more business.

And over time I took larger and sometimes smaller roles, but in the agency operations, I did spend a couple of three years in the direct operations for Fidelity in Western Michigan. And eventually got back into agency where I've been in this position for 10 years. How has it affected what I do? Because I know the Fidelity system. I believe in the Fidelity system.

And we love to share the Fidelity system with agents who are wanting to learn how to use it to their advantage. You're big on, uh, working on the business, not in the business. Can you elaborate on this approach and its impact on growth for title agencies? I'm a big fan of Michael Gerber's book, The E-Myth, and it's come up in other guests under pod. I read that years ago.

That was one of the first business books I read, beside the company. And from that helped me when I was working as an agency manager here to try to systematize things. So based on that, I concluded with my interactions with agents that most of them were technicians who fell into the title business and just were doing things the way they've always have been taught to do that with little modernization driven by the market or people they'd hired. But the concept of working on the business is pretty foreign to a lot of people I've discovered. That's my mission is to allow an agent, the tools and the support needed to let's take your P and L from QuickBooks and turn it from a rear view mirror into a steering wheel.

And we can do that using the exact same techniques Fidelity uses. Just let me show you how to do it. You'll be much happier in the long run. That's awesome. So how do you assist title agencies in implementing the strategic changes, especially when they face resistance to stepping out of their comfort zones?

So it's not my role to bludgeon anybody into being something they're not or doing something they don't want to do. So I educate, discuss, consult, talk. And if I can't, I can lead you to the water, but if you don't want to drink it, I'm not going to make you drink it. I've got other clients who are enthusiastic. So the answer is it usually takes some external event to create enough pressure to force the agent to realize it'd be easier to start making some changes than to just keep doing things the way we've been doing them in the past.

What are the most frequent challenges title agencies encounter when they try to elevate their business practices? The first thing is they don't necessarily have, I would say, strong enough sway or control over their agency. If they work in the agency, they're viewed as, yeah, he's the owner, but he's one of us, and they tend to be a little nervous about how the employees are going to accept any change. So they try to do it on the side and without really telling anybody what's happening, and it doesn't work very well. Here's a concrete example.

For me to provide some of the services, I need the QuickBooks exported every month and sent to me. If the bookkeeper isn't part of this whole process, it's just one more task. And they have to call up, hey, I didn't get the P&Ls for this month and the next month, I didn't get the P&Ls. So that's the biggest obstacle. So we have a very friendly educational approach to uplifting the knowledge of the entire agency staff so that it's clear, obvious, non-threatening, and why they'd be interested in working with us to help them make their lives easier.

We're located at home. So as friends with a lot of title agency owners, and a lot of them are just satisfied with their current lifestyle and operations, how do you address this inertia and motivate them to consider change and growth? Let me take a quick look here. Kelly Resendez, is that the, she was one of your guests. Yes, she's amazing.

And I mentioned her a little later, but I'll bring it up now. She talked about that, the idea that the work-life balance is a myth and don't spend time trying to balance work and life. Establish your personal priorities, your family priorities, your business priorities, and then arrange your life in a way that aligns with your priorities. So I'm a hundred percent into that. Thus, I don't try to force anybody to do anything that's not a goal of theirs.

It's not, I don't have time for it and it's not going to be very helpful for them or me. You emphasize education as a key to agency growth. What areas should title agents focus on for continual learning and what tools, resources do you recommend? An agent needs to understand how business works and how better to make decisions in a business context. So business works basically is balancing income and expenses and creating an operational structure, management structure, and all that, which aligns with customer service goals, profit goals, and employee satisfaction goals.

Once you have that understanding that everything has to be aligned, then you can start breaking the various processes or knowledge needed into small digestible pieces. Here's an example. Take an agent who's happy with their lifestyle and the way things are running. If they don't have an overarching goal, then it doesn't matter what they're doing, right? If you don't have a journey or a destination in mind, you can get there any way you want.

What do I help them do? First of all, if there's a reason they want to change, and then we start defining what does that change look like and can we put it into numbers? If we can then put it into numbers, then we can start focusing on objective measures, both small pieces and the big system. with their lifestyle and the way things are running. If they don't have an overarching goal, then it doesn't matter what they're doing, right?

If you don't have a journey or a destination in mind, you can get there any way you want. What do I help them do? First of all, if there's a reason they want to change and then we start defining what does that change look like and can we put it into numbers? If we can then put it into numbers, then we can start focusing on objective measures, both small pieces and the big system to help create a system of monitoring whether or not we're attaining or moving towards obtaining that goal. I don't know if that answers the question.

It does. And as you said, you have to have everybody row in the same direction in the company, the alignment of mission, vision, and goals. It's very important. Otherwise, everybody's going the wrong direction and there's a conflict and you're not going anywhere. So I'll give you an example if I might.

This is a common problem we have. I work with an agency that has two owners and they called me in through the local account manager because their workflow was a mess, meaning turnaround times too long and other problems. When discussing the situation live and in person with the agents, asking lots of questions, what the real problem was that one of the partners wanted to grow the firm quickly and largely, the owner was concerned about moving too quickly because of quality control and reputational issues. But they had never verbalized that between themselves or out loud in front of anyone else. So the solution to the problem was not to do a workflow study.

The solution to the problem is start by implementing what we call the metric system of management, which means measuring things and using the measurements as a foundation upon which you layer strategic and marketing issues. And from there, you make better decisions by having numbers as the foundation, you know what it's going to cost or how long it's going to take or what you're giving up in concrete terms as opposed to just gut feeling. So that's an example of how the process works. Lots of listening, as little talking as possible. Let's shift gears to operations.

You've spoken about implementing lean methodology. Can you explain how these principles apply to title agents and how they can streamline their operations for efficiency? So the first thing I like to do is establish a baseline of what they've been doing and that's simple math. Do you run a report for a three or four-year period? Give me a HR roster.

I can figure out how many people have been working each month and give you a baseline. This is where you've been. Obviously, based on one of your presenters and another podcast, we're talking about doing 15 deals a month per person and how you can barely make money if you're only doing 15 deals per person per month. So just using that as I think a great opening number. We then established with the agent, okay, here's 15, here's where you are, either down here or you're up here.

If you're down here, the question is, how do we get you up here? And first things first, which is the issue, you don't have enough business or is the issue of too many people? Now, this sounds obvious, it's one or the other. It's never one or the other. It's a combination of both.

For example, I've been in an office with one person, two people, three people. In my opinion, you can't run an office effectively, a solo one office with three people. You need four because someone's always in the bath that we're having lunch and then the phone's not getting answered. Okay, so with that in mind, if you have four people and you're doing six orders a month per person, 24 orders, the issue is laying someone off is getting more business because you can't run an office effectively. And again, in my opinion and experience with three people or two people.

So I look at it that way. Then the next thing is, all right, let's get some numbers, let's get some reasonable targets and let's work on the simplest low-hanging fruit. Let's eliminate unnecessary steps in your process. Okay, you all know the unnecessary steps, email comes in, you print it out, you put it in a file folder, you enter the order and then you scan the whole thing anyway, plus you pass on the file folder to someone else. And that's just the start of the duplicative steps and the unnecessary steps.

We do a workflow review and identify all these unnecessary steps and then work with the agent on how to streamline the steps, but not in a vacuum, streamline the steps in a way that aligns with the customer service promises that are being made. And you're very passionate about this. Yeah, no big secret, but the top three things going on in every agency is underutilization software, duplicative steps, and correlated a lack of training because no one has time to train. And it's too expensive, right? That's the theory, but that's where metrics comes in.

I can document how much it's going to cost you to train and I can document how much money you're wasting by not training. So you can make a better decision. That makes total sense. What new technologies are having the most potential for title agencies to adopt and how can they start integrating these into their daily operations? Okay, I want to give you an answer you probably don't want to hear.

This is the least glamorous answer. How about if you learn to use 70 to 80 percent of the already built-in features to your title production software before you worry about getting other things? So I would say the number one thing you should do first is master what's already there. What do I see not being used as templates? Most agents obviously have a template for doing a refi order, a template for a purchase order, but they don't have templates for each of the major lenders they're working with.

That's just one thing. And some of the softwares have these consumer interaction, the portals, they have different names. A lot of agents aren't using that stuff. So why bother chasing something new? First master what you got and then build on that if you need to.

That makes total sense. What about for the companies that already have all those things dialed in and want to get next level with technology? I don't have a great answer on that because the next level, the companies have already got it all dialed in. To me the next area is are they aligned with, are their core values aligned with their citials efforts? Are they objectively measuring whether the sales efforts and marketing efforts are effective?

Is the staffing and what they already have in place capable of handling the workload they're going for? And then is their workflow actually aligned with all the above? I do, I'll go to NS3 every year. I love it, but I'm not chasing the next big thing to start talking to my agents about because in general, those who are at the cutting and bleeding edge, they're way beyond needing my help. That's a whole nother story.

In certain areas, they're way beyond needing my help. But you often talk about boiling business down to its essentials. What key metrics advise title agents to track to ensure they're on the right path towards growth? Okay, so the main thing I work with them on to start with is how many people do you need in your office? And I use the example of assuming you have a title order that's delivered to your desk with every single piece of information you need in that title, whether it's electronic or digital, paper.

How long does it really take to go from start to finish? Okay, they'll give you 10 minutes to enter the order. Okay, 15, I'll give you 20 minutes online to do a tag search. Okay, three hours you need for a title search online, et cetera, et cetera. When you add it all up, again, assuming there's no delay between stats and all the information is there, what do you want, eight hours to do a file from start to finish?

Now, people argue there's some they can do in three if they did a refi last year, they're doing another refi. Some say it takes 14 if it's commercial, but let's just say eight hours. Okay, how many working hours are there in a day? Eight, right? Okay, so theoretically, a person could do a file a day or 20 a month, but of course that's ridiculous, so let's dial it down to 15.

I'll give you 12 a month, whatever you want, but let's use that as a baseline. Okay, so let's start with there. Now, if your staff is four or less, we have to start looking at how do you get more business? If your staff is four or more, the question is how much more business can you get? And it depends on market by market, so one bank in town or two, how many title agencies?

So how much of the problem can be solved by getting more customers and how much has to be solved by either freezing hiring as long as possible, to put it that way, and not necessarily replacing anybody when they leave? What are some initial steps title agencies can take to begin implementing lean principles in their operations, especially in smaller, more traditional settings? So the first thing I would do is to How many title agencies? So how much of the problem can be solved by getting more customers and how much has to be solved by either freezing hiring as long as possible to put it that way and not necessarily replacing anybody when they leave. What are some initial steps title agencies can take to begin implementing lean principles in their operations, especially in smaller, more traditional settings?

So the first thing I would do is to run some reports on how you've been performing in the past. So it gives you some context, okay? Then reach an agreement with your staff as what steps are involved in getting title from start to finish. The major steps in the secondary or the primary is secondary steps, not steps like do you open the envelope this way or that way, but what are the major steps? And you would think that people would agree on what's involved, but they don't because they may be from the escrow side versus the other side.

They don't understand all this involved, but get everyone to agree on what's involved. Then the next step would be, okay, we're looking at this benchmark of 15 out there. We're doing 10 to 12 or maybe eight to 10. Why are we doing zero? If we can agree on what these major primary secondary steps are, let's start tiling, take 10 files.

How long does it actually take to do each of these steps? Now we've got some reference standard, okay, takes us 13 hours to do a file when industry papers will say it takes anywhere from seven to 14. So why does it take us 13? And then the next step from there is let's figure out what we can do to shame down the time and just basically have an open discussion. So it sounds simplistic and of course it is.

The difference is that if you work with us or probably any consultant, we will work and facilitate that process. We're not going to tell you, here's all you need to do, good luck. But it is that simple, in my opinion, based on what I've seen. It's that simple. You got to start somewhere, you start simple.

We're not rocket mortgage, right? We're not worried about microseconds per file. At the level I'm working with of customers, we're trying to shave half a day, four hours. And when you can shave four hours off a file, that gives you an idea of how far off or how just an easier low hanging fruit it is. Given the current market conditions, what is your top back to basics advice that title agents should implement now to remain competitive and profitable?

The number one is to figure out why your customers are using you and then providing more of that, which means reaching out to them in person and asking the question. And then figure out what you can do with your staff to provide more of that and to free up the time to provide more of that, stop doing this stuff that's of no value. For example, people still email a commitment, but they also mail a hard copy because they understand from history that some people like hard copies better. That's obviously, as you can know, mostly a waste of time, mostly, not in every case. So I'll just leave it at that.

You're not going to magically change the interest rates. You're not going to magically double your business. You're going to have to do it by doing more of what works and less of what doesn't work. It's a process. In your experience, what are some common mistakes agencies make in their operational strategies and how can they avoid these pitfalls?

I think the biggest problem is the reason of strategy. You talked about inertia and this goes back to what Kelly had said in another podcast. What difference does it make if you have a five person office, you're in a town of 40,000, you're living the way you expected to live when you grew up, maybe you belong to the country club, your employees are all friendly. There is no mistake. You're fine.

But if you're trying to accomplish something and it's not working, the first mistake is that you haven't clearly defined your goals. Well, first you haven't defined your priorities and then the goals and then broken it down into at least one or two levels of action plan. And then the other thing you may not have done is either consult with your underwriter or account manager or a consultant on getting a third party opinion about, does this make sense or can it work? And then having an accountability coach or consultant or whatever. The lack of a goal, priorities, and clear actions.

I want to become stronger. What does that mean? It means I want to be able to lift 400 pounds on a bench press. Okay. How are you going to do that?

The power is in the specificity instead of being vague. As change can be daunting for many, what are your top tips for title agents to manage change in their businesses smoothly and effectively? Make sure you understand why you want to change and if you want to change. Do you want to do it because you have to do it or do you want to do it because you are excited about it? If you're doing it because you have to do it and you're not excited about it, maybe you're not in the right role, meaning maybe you should find a manager who is in the right role or maybe you should merge with somebody who really wants to be doing this.

So if you're not passionate about it, you're already going to be behind the eight ball. The magic word, passionate. Yeah. Again, if these aren't enough detail, I'm not sure how much detail you want in this conversation. Yeah, it's just, it's really having that mission and purpose and your why.

If you don't have that, it's usually the fuel that pushes you, drives you. If you don't have that and it just really coasts in your content, which there's nothing wrong with that. He said, it's out of 40,000, if you have a successful agency, that would be just wonderful for that. Not everyone can be the largest agent in the state, right? Not everyone.

And with the changes in technologies and automation and AI, wouldn't those type of agents become obsolete eventually if they want to adapt to the changes? Oh, I would agree with that, but it's going to be slower, Pat Stone said in his interview with you. It's a lot slower than you think. That's the whole purpose of this podcast, really, to educate our agents to change. The only constant is change.

We've either been very slow adopting technology and our business has been 20, 30 years behind, but we're definitely catching up, especially with the speed of adoption of AI. The world has changed and it'll be a different world in a year or two, and it's 100%. So either write it, or as you said earlier, merge with somebody that's passionate about change and growth. I've been working indirectly with an agent who is just tired of being the owner. So we're working with them to find a friendly buyer who would be happy to take over the operation and let the owner be the technician they want to be, do title exams, and not supervising all this other stuff.

So yeah, know thyself, and that will help you decide whether you want to slowly work your way out of it or pitch your wagon into another portion and move on. As someone who's passionate about teaching and collaboration, how do you keep yourself motivated and how do you inspire others to pursue continuous improvement? I think I'm super, in general, I'm pretty positive and very energetic, and I'm comfortable with myself. I know what my priorities are in life and in work, and I'm fortunate enough to be able to align all that. So I think that my enthusiasm and ability to explain things very simply are attractive to people, or at least heartening to people, and they're willing to give it a try.

And I say, look, I've spent 10 years breaking this down to super simple stuff. For those of you who ever played pickleball, pickleball is so attractive and so fast growing because it's very easy to learn and play, but there's opportunity to be as strategic and as hardcore as you want. So with what I'm doing, trying to help agents work on their business, we can start out really simply and then get as detailed as you want, including when you want to start shaving 10 minutes off a file prep here and there. We can get to that level, but right now, let's start at the basics, and I'll give you a story. I worked with an agent for several months.

We did their financial metrics and their workflow metrics. They said they weren't interested in the financial metrics, they just wanted the workflow metrics. And they really only wanted three things, which I delivered to them. They want three numbers, open orders, closed orders, staff count. So I can do my magic with their numbers, and they're perfectly happy, and they reported back at a dinner one time, their productivity's up 25% simply by tracking open orders, closed orders, and staff size.

And then not making the mistake of hiring or releasing people, as order counts go up and down, they look at the historical track record. Oh, we're well within the range, let's just sit tight, maybe we get a few more orders. Or we're really busy, no we're not. We did twice as many deals two years ago with the same number of people. Let's start cutting out unnecessary steps and get focused on training.

Again, three numbers, and again, it's as simple as that. mistake of hiring or releasing people, as order counts go up and down, they look at the historical track record. Oh, we're well within the range. Let's just sit tight. Maybe we get a few more orders.

Or we're really busy. No, we're not. We did twice as many deals two years ago with the same number of people. Let's start cutting out unnecessary steps and get focused on training. Again, three numbers.

And again, that's how simple it could be. Do you have any other successful stories of companies you work with that have seen significant improvements to their business? Let me explain it this way. I've thought about that. So in my role, I have to demonstrate that I bring value to fidelity.

As well as bringing back, I'm going to demonstrate that I bring value to my agents, the agents I work with. So how that works is that I have to come up with real numbers from our computer systems, tracking not just remittances of the agents I'm working with, but the remittances, rate of change of those remittances as compared to the rate of change of the real estate market in those areas. So that jumping without explaining all the math, I can show you that when I'm working with an agent in conjunction with our local account manager, when the market is increasing, our remittances from those agents is going up faster than the market. And when the market is decreasing, our remittances are going down less quickly or slower than the decrease in the market, which in my mind is about as good an evidence as you can get that I'm delivering value to both the agents and fidelity. That's awesome.

We're getting very close to the end here. Any final words before we go to our last two questions? We have our favorite quotes and favorite book. I always end with those questions. Any final words of wisdom?

I would say that the longest journey begins with one step. So don't worry about the fact that it looks like you're trying to climb Mount Everest. Let's just start on the first step. And the first step, if you want to do something, anything is run an order report, figure out how many orders you've been getting each month for the last two or three years, and figure out your staff size each month. And then just in Excel or by hand, you could start graphing that.

And then you'll have a better idea of what you've been doing. And then you can decide whether you want to do better or you're comfortable with what you're doing. That's awesome. Do you have a favorite quote? I do.

And it's by George Bernard Shaw. And it's this, the single biggest problem in communication is the illusion that it has taken place. That is very deep. I'll give you a silly example. It happens every day at home.

But the other day at corporate, I got an email that said, hey, the vendor delivered a shirt and the logo was wrong. So please confirm that your shirt has the correct logo. So I go upstairs and I look at my shirt, it's got the brick. So I reply, my shirt has a correct logo. Then a few minutes later, I get a reply back, which says, oh, which shirt are you talking about?

Sure. The only shirt. So the idea is that everyone thinks the speaker thinks the listener knows what they're talking about and vice versa. It's a movie lost in translation. Now, again, I keep talking about Kelly.

She talked about being happy with the priorities and alignments. I do have a funny, humorous life quote. It is from Bill Murray in Candy Shack, which is, and that's all she wrote. I say that all the time when I'm, for example, playing pickleball and I have a fantastic shot, put away shot or whatever. The idea is that it's celebrating something I've accomplished, whether it's at work or in sports.

A business quote is about communication. The personal one is Bill Murray. I love both. How about a favorite book? My two favorite books are The E-Myth by Michael Gerber and then Pitch Anything by Orrin Glass.

It really simply explains how the brain works and how to communicate more effectively. And I always warn people, just please ignore the examples he uses because they're so out there. I mean, they're just explaining it because they're Wall Street type examples or Hollywood Wall Street, but the principles are amazing. So those two books. That's awesome.

I've definitely read The E-Myth and E-Myth Revisited, but I'm not sure if I read Pitch Anything and definitely be next on my audible list. Thank you, Ethan. We hope you enjoyed today's conversation with Ethan Pausner and gain valuable insights to drive your agency to growth. Remember to subscribe for more expert advice and strategies tailored for title professionals. Keep evolving, keep innovating and join us next time on Title Agents Podcast.

And that's a wrap on today's journey with Mo Shamil from the Title Agents Podcast, reminding you that mastering the art of innovation is key in the title industry's fast-paced world. If you're finding it tough to keep up with the changes and challenges, remember, you're not alone. Our calendar is open for you. Find the link in the show notes and let's connect. Make sure to hit subscribe to not miss out on strategies that elevate and insights that empower.

Together, we'll navigate the future of the industry. I look forward to our next meeting in the upcoming episode. Keep pushing, keep innovating, and see you in the next episode.