By all accounts, the housing market is shifting into a different gear in 2019. The nation's economy remains strong, unemployment is at a record low and wages are increasing. Nonetheless, mortgage origination volume is shrinking, so lenders will need to fight harder for a smaller piece of the pie.
This past fall, Fannie Mae's Mortgage Lender Sentiment Survey found that lenders reported a net negative profit margin outlook for the eighth consecutive quarter. Competition among lenders was cited as their biggest challenge.
In a tight market, an obvious strategy is to find a way to generate more repeat business, whether that’s for home equity products, refinances, or purchase loans. One of the best ways to accomplish this is to partner with appraisal providers that are just as dedicated to providing an excellent customer experience as you are.
Because they usually have limited contact with appraisers, consumers often feel detached from the appraisal process. This is not a problem when appraisals go smoothly, but very annoying to the consumer when they don’t.
When appraisals are performed by someone who doesn’t have local knowledge or the expertise to value special circumstances, or when there are delays—which are happening more frequently because of appraiser shortages in certain markets—they create unhappy borrowers. On the other hand, when customers are happy, they are more likely to use your services again and spread your good name with their friends and family.
To help you identify what appraisal providers can do to create happy customers, we’ve created several questions you should be ready to ask them. Keep in mind that variations of these three questions can be used for other third-party services as well.
- How will you make my customers happy?
No doubt, getting a mortgage and buying a home is one of the most anxiety-ridden endeavors a consumer can make in their lifetime. A big reason for this is all the uncertainty involved. There’s the uncertainty of being able to quality for a mortgage, the uncertainty over if and when the loan will close, and uncertainty about what the home will appraise at.
Your valuation provider should do more than produce a quality appraisal. They really need to be thinking of your borrowers—because borrowers are their customers, too.
That being said, appraisals are not known for being a particularly happy experience for the consumer. But a valuation partner that gets appraisals done in a timely manner and goes out of its way to explain the appraisal process and the details of the report has an opportunity to make the process informative, educational and efficient to borrowers. Your valuation partner should be able to tell you how they make this happen. And if borrowers have questions about their appraisal, there should be someone to call—even over the weekend, if necessary.
- “What's the status of my appraisal?”
It’s the borrower’s age-old question, and there’s little wonder why. Appraisals are part of the mortgage process, yet somehow separate. As a result, the borrower often does not have much insight about when or how the appraisal takes place—they typically only know when the report is done. But because delays can and frequently do happen with appraisals, this question gets asked again and again.
We say, “Enough!” There is no legitimate reason why borrowers must constantly wonder what is happening with an appraisal when the valuation provider—with the aid of technology—is committed to proactive, transparent communication with all parties.
The more innovative valuation providers are using proprietary online tools that automatically update all parties in a real estate transaction about the status of an appraisal order, as well as the appraiser's name, contact information and the type of vehicle they drive--all information that minimizes delays involved with appraisal appointments.
If your valuation provider doesn't provide such technology or something similar, you should find one that does. It also helps prevent miscommunication, which is one of the main causes of appraisal delays.
- How quickly can you have my report?
A home appraisal can go smoothly or not. Sometimes when it doesn’t go smoothly, it's nobody's fault. For example, an appraisal can uncover unseen or previously unknown issues with a property that make it ineligible for a certain type of loan without repairs, which can throw a huge wrench in the borrower’s ability to close.
For this reason, most appraisal companies do not like to promise that they will deliver an appraisal by a certain date and time. On the other hand, they should be able to explain their appraisal process in detail and list the steps they take to ensure every appraisal is completed as efficiently and as timely as possible. For example, do they use accelerated quality reviews? What processes do they employ to avoid delays in setting up appraisal appointments?
Obviously, there are other factors involved with increasing repeat business than a smooth appraisal process. But because appraisals have traditionally been one of the biggest hurdles in closing loans, lenders are smart to be thinking about their choice in appraisal partners for the coming year. If you are one of them, perhaps the above questions will help.
If you want to find out how we can assist you in becoming more successful in 2019, drop us a note at email@example.com or give us a call at (281) 313-1571. We would love to help you find your own success!