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   ARTICLE   |   From Scotsman Guide Residential Edition   |   October 2005

Your Strength is in Your Follow-Through

Better your chances of closing more loans by keeping up with your appraiser

What do a scratch golfer and the most-successful loan officers have in common? If you said “good follow-through,” you hit the nail on the head.

In previous Scotsman Guide articles, I covered the first two of three key points that, when properly implemented, may not improve your golf game but will improve your close ratio. First was prequalifying your borrower’s property collateral, and second was locking out your competition by getting your borrower to commit. This month, I will focus on the third key point: following through.

If you already have implemented the first two tips, congratulations. By now, you are using your appraiser and appraisal-related technology (automated valuation models, plus comp and data reports) to prequalify your borrower’s property collateral. You also are receiving alerts of any potential value issues upfront without having to wait for the appraisal to come back. Because you now are requesting that your appraiser set the property inspection within 24 hours, you are keeping your competition at bay. Your cancellation rate likely has decreased, and you are closing 20 percent more loans. Right?

Before you buy that new set of “pings” with some of the extra cash you are earning, let’s make sure the check clears. Accomplish this by working on your follow-through.

Typically, follow-through may be necessary at three stages of the appraisal process:

  1. Immediately after ordering the appraisal; 
  2. When setting the inspection date; and 
  3. Before the delivery date.

Following through doesn’t have to be a time-consuming process, thanks to the outsourcing and automation options available.

Steps to a successful follow-through

It is not enough to simply ask your appraiser to contact your borrower and set the inspection within 24 hours. It also is not enough to merely assume the appraisal will be delivered by the date you requested. There are a few steps to ensure that it goes as planned.

  1. Communicate with the borrower immediately after the appraisal is ordered to eliminate any “surprises” and allow a timely inspection. Too often, appraisers attempt to contact the borrower and/or real estate agent to schedule an inspection date. Then, they find the borrower has not been notified of the appraisal being ordered, the cost of the appraisal or the required method of payment. This is especially important when the appraisal fee is c.o.d. 

  2. Your appraiser should be notifying you, preferably via e-mail, with the specific date of the scheduled inspection. This ensures that the inspection has been set with the borrower. If your appraiser has not notified you of the inspection, you should assume it has not been set. If the inspection is not set, you are more vulnerable to your competition. At this point, a follow-up phone call and/or e-mail to the appraiser is warranted.

  3. The day before the appraisal is due, contact the appraiser to ask for a status update, noting the pending due date. This communication is powerful. By this point, the property has been inspected, and your requested delivery date is approaching. Like loan officers, appraisers — especially the good ones — are busy. Due dates sometimes are missed. By consistently staying in contact with your appraisers, the adage of “the squeaky wheel gets the oil” rings true more times than not. If the appraisal still is not delivered by the due date, you must follow up again the appraiser, and the appraiser should provide a new completion date. From this point, follow-up efforts should be redoubled until the order delivers. 

  4. Finally, you should rate the appraiser’s performance, good and bad. By rating the appraiser, the next time an appraisal order comes in that area, you’ll remember whether to use the same firm or find another.

In-house, outsource or automate

Your internal processing staff can complete the aforementioned steps in this follow-through plan. It will likely result, however, in a significant increase in processing time. Before you dedicate your staff to such a procedure change, check out a few appraisal-management companies or appraisal-management-software providers. There are several options.

  • Appraisal-management-software providers help your internal processing staff by automating many follow-through procedures. This approach saves time and retains control of your appraisal process. These systems typically require a higher initial investment of time and capital.

  • Appraisal-management companies allow you to outsource the entire appraisal process. This approach can eliminate the need for in-house appraisal-processing with little to no initial investment. The downfall of these companies is that the broker typically loses control of the entire appraisal process and generally cannot work directly with the assigned appraiser.

  • Assisted appraisal processing is a combination of appraisal-management software and an appraisal-management company. This solution provides the best of both worlds. You maintain full control of the appraisal process and work directly with the appraiser of your choice. Because the follow-through is automated and backed by human support, your firm’s internal appraisal-processing hours can decline while your close ratio simultaneously increases. If an order is not accepted, an inspection date not scheduled or a delivery date missed, assisted appraisal processing follows up for you. You are involved at your discretion and notified when your involvement is necessary. Some providers electronically send status updates throughout the process, which helps keep you on top of your game and in control of your appraisal process.

Remember that each of these types of services is different, as are the companies that offer them. Not all watch your appraisal process closely. If your firm decides to outsource or automate, be sure to ask appraisal companies about their support operations before you trust them with your appraisal orders.


 


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