What Homebuyers Want: Automated Processes And Human Help

What Homebuyers Want: Automated Processes And Human Help

Brokers who provide outstanding customer service now will win for years

BY DANIEL AKIVA | SPECIAL TO NATIONAL MORTGAGE PROFESSIONAL

After April’s 18% decline in home sales, May saw a 26% month-over-month jump in new home mortgage applications (up 10.9% from 2019). The trend accelerated in June, with a 20% month-over-month increase (up 54.1% from 2019) Pent-up demand, combined with historically low rates, means those who can buy homes are eager to do so.

But it’s not just the return to buying that’s important right now. It’s also the way people are buying. Demand is high but stock is low, meaning sales for desirable properties are happening fast. What’s more, ongoing social distancing means many buyers and sellers are reluctant to share space more than necessary, making digital tools more important than ever.

And yet housing remains the biggest purchase many people make. So for wholesale lenders (and the brokers that offer their products), automated tech to speed and distance processes isn’t enough. They need to have human support accessible and at the ready.

If they can leverage automation to create an accelerated homebuying experience, while also providing pathways to human support when things get tricky, wholesale lenders and brokers can help borrowers feel empowered, educated, and confident in their decisions.

Automation and human support don’t have to be at odds with each other. A closer look at the specific features customers want during the mortgage process shows how the two can work hand in hand. Here, I’ll highlight key findings about contemporary borrower expectations for the mortgage application process and explain how wholesalers can meet those expectations to win more customers.

HUMAN ENGAGEMENT: FOR THE UNEXPECTED

To understand how today’s homebuyers see automation and human engagement as complementary forces, take a look at Amazon’s customer support.

Say a customer intended to order a single hand-soap dispenser but rushed the buying process and accidentally ordered 24. Rather than hoarding them all, they can instantly contact a representative through the mobile application, either over the phone or through a chat feature.

In other words: as long as everything’s going as expected, customers like digitized, automated processes. If the customer ordered what they intended to, there would be no need to contact a customer service rep.

But when something goes wrong, they want a human to hear their concerns, answer their questions, and make sure they get to an outcome they’re happy with.

This is the new standard for shopping and buying experiences – including shopping for and buying a home. Consider these findings:

· Half of all borrowers choose their lender based on whether they offer an online application or portal. Borrower demand for online options increased 18% between 2017 and 2019.

· 70% of borrowers want a more digital closing process – and 81% want to handle that process in person.

· Millennial borrowers are 30% more likely than those in the Boomer generation to meet frequently with their lenders in person, meaning that even “digital native” borrowers want human support during the complex mortgage application process.

· Among members of Gen Z (those born after millennials), 79% expect that they’ll want to work with someone face to face when buying a home, again showing that comfort with technology doesn’t supersede the desire for human support.

These findings suggest that the ideal mortgage application process is one that makes the paperwork portion of the application available digitally and also provides ready access to a broker who can answer questions, make recommendations, and offer wisdom about the larger homebuying journey.

That’s good news for wholesale lenders: today’s homebuyers want experienced mortgage brokers with access to digital tools that let them automate as much of the process as possible.

HOW TO DELIVER THE RIGHT PRODUCTS AND TECH

Getting the mortgage application process right matters a lot to today’s homebuyers. But I won’t pretend that it’s become more important than the actual products you make available. No one wants to pay a steep delivery fee for a restaurant they can carry out from right down the block. Similarly, even the most impatient homebuyer will likely understand the value of jumping through a few extra hoops if it means a significantly better interest rate.

Still, we live in the age of customer experience. About three-quarters of banks have accepted this reality and named improving customer experience as their top strategic priority. The companies that provide a stellar customer experience during these times of uncertainty will win customers for years to come.

Wholesale lenders that want to stay competitive in the long term must accept this reality as well. In most cases, creating the kind of customer experience today’s homebuyers expect means investing in technology that facilitates automation so brokers can combine their in-person expertise with lightning-fast online tools.

The difference automation makes is significant: despite innovations from recent years, it still takes about 30 days to close a new mortgage. By investing in online tools, the New York Fed calculates that lenders could cut that process down by nine days for new loans and 14 for refinance loans.

That time savings happens because automation allows each step of the process to move more quickly, thanks to features like automated initial disclosure generation, e-signatures, and intelligent borrower needs lists. These features only become more important as borrowers are forced to navigate social distancing requirements, travel restrictions, and increased economic uncertainty.

For wholesale lenders, it’s important to recognize that it’s not just a matter of considering what customers will experience as brokers offer them your products. It’s also important to consider how your process compares with the process of every other lender your broker works with.

It’s also important to note that borrowers aren’t the only ones who benefit from increased automation. Brokers can work faster and more efficiently when they have access to mortgage automation tools.

Remember that your brokers are your first line of contact with borrowers. To ensure borrowers understand the benefits that mortgage automation tools offer them, be sure to educate your brokers on “distance lending,” or how they can continue to provide top-tier customer service in a post- COVID world.

Mortgage automation benefits everyone in the process; making sure that message gets communicated and brokers are fully aware of all the available functionality ensures all the benefits are fully realized.

57% of consumers admit that they’ve stopped working with a business to go to a competitor that offered a better experience.

THE FUTURE IS TECH-POWERED HUMANS

Statistics about mortgage borrowing from the last few years show us that borrower expectations are changing, but human nature is not. Extended periods of lockdown only solidified these expectations.

We expect more than ever from the technology available to us, yes, but we still want guidance and reassurance when we take on unfamiliar projects with high stakes.

More than ever, today’s borrowers are willing to shop around if they don’t get that blend of automation and human support: 57% of consumers admit that they’ve stopped working with a business to go to a competitor that offered a better experience.

Wholesale lenders need to equip their brokers with the tech that both empowers them to automate the origination process and enhances their legendary customer care skills. If they can do that, they’ll deliver the tech-forward, human-enabled experience homeowners want.

Daniel Akiva is the chief technology officer at Cloudvirga.