That's correct.
Acquiring Minds
Second-Time CEO Buys a $30m Title Company
Episode
Excerpts · 345 segments · ~1:22:28 long
Short excerpts only — hear the full conversation on the publisher's site.
05:00 Lawyer to CEO at 2911:00 Wanting equity, path to search18:28 Accessing search capital mid-career23:41 Finding and understanding Meridian Title33:40 Title industry cyclicality risk46:59 Deal structure and financing55:15 F reorg saves the deal59:09 Reps and warranties surprise1:05:59 Leadership changes and CFO1:13:04 EOS Lite operating model
And so you are really tied one to one with the home sale transactions that occur in any given year. That is your, that is, you know, a big chunk of your tam. Yep. And so as we all always hear, the housing market is notoriously cyclical and we don't like cyclicality as, as buyers. How did you get comfortable with that feature of this?
Yeah, so the first thing I needed to do was really understand what does that cyclicality look like in the industry. Refinance is pretty obvious, right. Rates go up, fewer refinances, rates come down, more refinances.
And it's very volatile. Existing home sales are our bread and butter. It's the bulk of what we do.
We don't do a lot of, we do some new builds, but it's, it's largely existing home sales. And I went back 40 to 50 years and looked at the history of, of existing home sales and what I found was that I think there was one year in that entire period where existing home sales declined and it was by about a percentage point where there wasn't a macro like a recession that impacted all business.
And so it kind of stood out as this is actually a really steady industry. It's not high growth. But if we're going to have a recession, it's going to impact most business title as well.
Now, what we didn't know was going to happen is that we would actually for the first time in at least 50 years, see home sales drop significantly while the economy is doing great. And largely that it was such a unique event with COVID and rates being already artificially depressed and then rates jumping up dramatically. It just created a whole, whole new environment that I didn't.
I modeled out a decline in home sales to some extent, but I did not expect a 40 to 50% drop. Well, it wasn't probably 35 to 40% drop in home sales. So once we got into the business.
Is that what it's been?
Yeah. Wow. It's, it's been brutal for everybody in the industry. But you know, there's some benefit to that. We're all going through the same thing.
And so at the end of the day it becomes how do you manage your way through it? And hopefully, you know, we feel like we've done a great job getting through it and it's going to put us, has put us in a much stronger position as, as a company in our industry coming out of this. Sure. So hey, I would, I would prefer home sales be at 6 million SAR for 2026, but that's not going to happen happen and…
And I think we have and really given ourselves a great opportunity.
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