About That Compass Acquisition of LegacyTexas Title: Q&A With Laurence Henry

Business consolidations are a part of the global business landscape and commonplace in real estate, as we know well in Dallas.

With the news last week of LegacyTexas Title’s sale to Compass, an acquisition, I wanted to gather more details with Laurence Henry, President and former owner of LegacyTexas Title. Henry was kind enough to indulge me and my questions:

Laurence, this is fascinating: Compass is now buying title companies, who knew? Legacy was the third Title Company Compass acquired, now a fourth in Denver. So my first question is: why did you sell?

Laurence Henry: Candy, like every industry, the title business is constantly evolving.  As a small operation, we were battling billion dollar national underwriters, hedge funds, and title operations that already share ownership with real estate brokerages, lenders, builders, etc.  This alignment with Compass allows us to compete on a bigger scale than if we continued as an independent.  More importantly, it gave our employees a better opportunity for professional growth, leadership, and other success.

Okay, so why Compass?

LH: Honestly, we weren’t looking to sell.  I’d always planned to be independent, but the more we examined everything, we felt it was the best of both worlds.  It gave us the capital and resources to be stronger and more efficient, and the freedom and flexibility to maintain what does work so well for us because they aren’t interested in telling us how to run our shop.      

What’s gonna change?

LH: From the agent’s perspective, hopefully, nothing.  We are still LegacyTexas Title and won’t be adding “Compass” to any part of our brand.  We have the same closers, leadership, staff, attorneys, etc.  This just gives us a bigger foundation to be successful. 

I got a call from a Briggs agent this past weekend, and she jokingly asked if I still took calls from other brokerages.  I assured her that she was more important to me now than ever.  I have built my career being available to agents (often on deals we don’t even have at our company).  My biggest reward is being able to pull an agent “out of a ditch” (or keep them out of that ditch) on a Saturday afternoon or Tuesday night when nobody else is available.  That isn’t going to change.

Will you at all be managed by the brokerage side? 

LH: Absolutely not.  We are under the title and services side, and although we both flow up to the same parent company, we will maintain independent leadership and management.  Nobody at the brokerage side will have access to our escrow software, closing details, etc.  That also continues to be governed by federal and state privacy and escrow laws.  

Some agents might see this as a conflict of interest, do you? 

LH: In Texas, all title companies are regulated by the Texas Department of Insurance, which sets what coverage we can offer and what the title premium cost is, so we couldn’t favor anyone even if we wanted.  The reality is that in every transaction, the title company usually has an agent on one side that directed the business and might have a long-standing relationship to that title company.  Is that a conflict of interest?

The real estate community knows who we are, and we have a reputation for being neutral and professional.  That’s never going to change.  I grew up with family at different brokerages and still do.  Most of our clients and agents are personal friends.  I have never favored any real estate brand, agent or customer over another.  It’s not who we are, and it certainly wouldn’t be good for business. 

So … will this relationship benefit Compass agents?

LH: No, RESPA doesn’t allow an agent to be compensated for referring business.  While some of our profits will ultimately go to the parent company, that would only benefit an agent if they were a shareholder, but anyone can buy stock in our parent company.  The vast majority of our revenue will continue to stay in Dallas to our employees, office space, vendors, etc. 

I assure you I didn’t stop buying Duracell batteries when Berkshire Hathaway decided to open a title company in Dallas out of fear that my purchase of a shared brand would support my competitor.  We live in a world where several brands are under a single company.  This is no different.   

Ah yes so much is intertwined! Will you be collaborating with the brokerage side? 

LH: I hope so, but not any differently than I will with any brokerage.  We want to continue to be a valuable tool and resource for every brokerage whether it be training, guidance, or other support.

How about fees, will they change? 

LH: Our fees will continue to be the same and won’t be affected by new ownership.  Our fees will be the same for all of our customers regardless of affiliation.

Inquiring minds need to know … are you planning on expanding? 

LH: I would like to expand, but our primary focus is to build and support our Park Cities office and its agents.  Of course, as opportunities present themselves, we are now better equipped to act on them more aggressively and quickly.