Fidelity Title Calls Off the LandAmerica Merger

Update: Since I wrote this post, Fidelity is back on with the LandAmerica merger (11/26/2008).

LandAmerica has released a statement to the public regarding this recent debacle which has many wondering what will happen to this large title insurance underwriter.   As I write this post, their stock is sitting at $0.54 a share.  LandAm’s 52 week high is $53. 

From Inman News:

The deal was announced on a Friday. The following Monday, LandAmerica detailed record third-quarter losses and said the company was in violation of financial debt covenants of its note-purchase agreement and credit agreement (see story).

LandAmerica said it was in discussion with creditors to obtain waivers. If not waived, the covenant violations “constitute an event of default under the agreements, giving the lenders the right to declare all principal and accrued interest payable immediately,” LandAmerica said at the time.

LandAmerica’s public statement, which is in a question and answer format clearly states that their ability to pay claims is adequately covered by the reserves.   Locally, LandAmerica has joint ventures with Commonwealth of the Puget Sound  (Windermere), Rainier Title (John L. Scott and Coldwell Bank Bain) and Northpoint Title.   From the statement:

What about other LandAmerica entities?

LandAmerica is comprised of many separate legal subsidiaries with separate profit and loss statements.  Some entities are performing well and others are not performing well.  We are working closely with the Nebraska Department of Insurance, which is where major underwriters are domiciled, to resolve our situation in a way that benefits our policyholders.”

This leaves a bigger question of what percentage of ownership does LandAmerica have in these joint ventures and what will happen to these ownership shares?

What is the financial viabililty of LandAmerican underwriters?

The LandAmerica underwriters, Lawyers Title and Commonwealth have over $300 million in combined statutory surplus.  And we have some of the industry’s most stringent requirements for reserves in place to protect our policyholders.  The LandAmerica underwriters’ claims reserves are backed by over $1.1 billion in cash and investments.”

Reserves are mandetory…what about operating expenses?

Congratulations to Russ Cofano

This is huge news for a local real estate company… Long-time Rain City Guide contributor, Russ Cofano, recently accepted a position as Vice President and General Counsel at John L. Scott. From an email I received from Russ:

For me, the New Year is bringing a major change. Beginning Monday, January 14, 2008, I am joining John L. Scott Real Estate as Vice President and General Counsel. The decision to leave Bullivant Houser Bailey was a difficult one as this is a truly exceptional law firm. At the same time, my new role at John L. Scott will provide unique challenges and opportunities for personal growth. John L. Scott consistently ranks in the top 10 of U.S. independent real estate brokerages and I am looking forward to helping them in their continued growth as an industry leader.

Russ was clearly instrumental in the early growth of the Rain City Guide community! And for anyone who was around for the early discussions between Russ and Ardell, it was like having a front row seat to a force of nature! I learned a ton from Russ on so many levels and am so excited to have him back “in the industry!”

By hiring Russ, John L. Scott is getting a lot more than just a superb lawyer. They are getting a thought-leader in the world of online real estate!

The race for 2nd place has begun

OK, I’m biased and I still believe that “Zearch” is currently King of the Hill of King County home searches. However, I’m willing to give credit where credit is due and say the distance between us and the rest of the pack got smaller today.


Today, John L Scott and their solution provider, Bellevue based Real Tech, have quietly introducted what they call “Real-Maps 2.0“. Essentially, they are now using Microsoft Virtual Earth instead of the old school ESRI based solution. Additionally, it appears they’ve AJAX-ifed their search pane on their map page, so when you change search criteria it automatically updates the map and the matching results count (which is pretty slick). It also appears that Real Tech has gone all out, and at first glance, it appears they are using the not quite released Microsoft Atlas framework (a new development tool that makes “Web 2.0” style applications easier to develop). It appears they are using JSON for the postbacks (most sites use XML, I currently send back Javascript source code). I haven’t spent much time reverse engineering it or learning Atlas yet, so it’s possible they are using a 3rd party AJAX framework. Regardless of the technical details, it does raise the bar for everybody else.

So what does this mean? Here’s my thoughts….

  • Me – Time to install and learn Atlas this weekend. If I’m going to remain competitive with the big boys, I gotta be using the same tools that the big boys are using. Besides doing complex AJAX with 2.0 ICallbackEventHandler is bit tedious for my liking.
  • Galen – Wondering if he should rewrite ShackPrices so it uses Ruby on Rails instead of PHP?
  • ESRI – Between Google Maps & Microsoft Virtual Earth, this company won’t be serving the real estate mapping market much longer.
  • RedFin – That flash based satellite map, though very cool in it’s day, is increasingly looking like a liability. Better update it, do as Zillow did (partner with GlobeXplorer & Microsoft), or let one of the big boys handle your maps. Any map in which the Issaquah Highlands looks like polar bear eating vanilla ice cream during a snow storm, doesn’t cut it for me.
  • Zillow – Better do something cool with that MLS data you’ve been collecting. Otherwise, those eyeballs you were counting on, will be visiting the big brokers instead. Fortunately, for Zillow they could lose the local battle, but still win the national war. The NWMLS is releasing sold listing data in the near future and I’ll be shocked if the local big brokers don’t add “Zestimate” like features to their web sites in the next 6-12 months. Hell, Rain City Guide, already has one, but you already knew we’re ahead of the curve. 😉
  • / HomeStore / Move – Obi Won “Dustin Luther” Kenobi – Are you their only hope? Do something! Add an Rain City RSS feed, if you have to! Anything! 🙂
  • Coldwell Banker Bain – Since they are also Real Tech customers, I suspect they’ll be asking for Real-Maps real soon now.
  • Windermere – They can’t be far behind their arch-rivals, or can they?
  • Other local brokers/agents – Time to re-evaluate your MLS search/IDX vendor? Now that John L Scott’s web site has entered the 21st century, the pressure is building for you to join them.
  • John Q Home Buyer in Seattle/Eastside – The new John L Scott, is like RedFin but with better maps & aerial photos.
  • Everybody else, elsewhere – Consumer expectations are slowly being raised. I believe Seattle is ground zero of Real Estate 2.0. Those of you lucky enough to be living outside of the 206 & 425 area codes (aka the war zone), had better pay attention, because what’s happening here will happen in your neck of the woods, sooner than you think.

So what do our fair Rain City Guide readers think of this development?