Close 20% more loans by better utilizing your appraiser. Part 3

Close 20% more loans by better utilizing your appraiser.
By Brian Blanchard, Chief Operations Officer, PROvalUSA.com

Part 3: Follow through

What do a scratch golfers and the most successful loan officers have in common??

Good follow through!!

In prior Scotsman Guide articles, we covered two of three key points, which, when properly implemented, may not improve your golf game but will improve your close ratio. This month’s article will focus on the third point, follow through.

If you have already implemented the first two of the three key points previously covered, congratulations. By now, you are using your appraiser and appraisal related technology (AVM’s and Comp & Data Reports) to pre-qualify your borrower’s property collateral (estimated value) and are being alerted of any potential value issues up-front without having to wait for the appraisal to come back. Also, since you are now requesting your appraiser to set the property inspection within 24 hours, your competition is being kept at bay. Your cancellation rate has dramatically decreased and you are closing 20% more loans, right?

Before you buy that new set of “Pings” with some of that extra cash you are earning, let’s make sure the check clears. This can only be accomplished by working on your follow through.

Typically, follow through may be necessary at 3 stages of the appraisal process: 1) immediately after the appraisal has been ordered; 2) when the inspection date is set; and 3) prior to the delivery date. While this can be a very time consuming process, it does not have to be thanks to outsourcing and automation options now available.

I will describe in greater detail, the necessary steps to successful follow-through. Then, I will cover outsourcing and automation options.

It is not enough to simply ask your appraiser to contact your borrower and set the inspection within 24 hours. Nor is just assuming the appraisal will be delivered by the date you requested adequate.

1) Too often appraisers attempt to contact the borrower &/or real estate agent to schedule an inspection date only to find the lender has not notified the borrower of the appraisal being ordered, the cost of the appraisal, and the required method of payment. Simple communication between the lender and borrower up front immediately after the appraisal has been ordered will eliminate any “surprises” and allow a timely inspection. This is especially important when the appraisal fee is “Collect at Door”.

2) To insure the inspection has been set with the borrower, your appraiser should be notifying you, preferably via e-mail, with the specific date of the scheduled inspection. If your appraiser has NOT notified you of 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 &/or e-mail to the appraiser is warranted.

3) By this point, the property has been inspected and your requested delivery date is approaching. The day before the appraisal is due, the appraiser should be contacted by phone and e-mail, reminding him of the pending due date and asking for a status update. In our experience, this communication with the appraiser is very powerful. Like loan officers, appraisers, especially the good ones, are very busy. Due dates are sometimes missed. By consistently staying in contact with your appraisers, the old 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, another follow up with the appraiser must be made and a new completion date should be provided by the appraiser. From this point, follow up efforts should be re-doubled until the order delivers. Finally, the appraiser’s performance should be rated, whether good and bad. Then, the next time an order comes in that area you can remember whether to use the same firm or find another.

In-house, Outsource, or Automate The above steps in this follow through plan can all be successfully completed internally by your processing staff. However, it will likely result in a significant increase in processing man-hours. Before you dedicate your staff to such a procedure change, check out a few Appraisal Management Companies and/or Appraisal Management Software Providers. There are several available to lenders, both large and small.

Appraisal Management Software Providers assist your internal processing staff by automating many of the procedures defined in this article. This approach saves man-hours and keeps you in 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 virtually eliminates the need for appraisal processing man-hours with little to no initial investment. The downfall of these companies is that the lender typically loses control of their entire appraisal process and is typically not allowed to work directly with the appraiser assigned to do the job.

Assisted Appraisal Processing, a balanced mixture of appraisal management software and an appraisal management company. This solution offered by firms such as PROvalUSA.com, provides the best of both worlds. You maintain full control of the appraisal process and work directly with the appraiser of your choice. Since the follow through is automated and backed by dedicated human support, your firm’s internal appraisal processing man-hours can actually 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 so you don’t have to. You are involved at your discretion and notified when your involvement is necessary. Some providers send status updates electronically through out the process, consistently keeping you on top of your game and in control of your appraisal process.

Remember, each of these types of services are very different as are the companies themselves. Not all of them watch your appraisal process as closely as the plan we have just laid out. If your firm decides to outsource or automate, ask the industry partner of your choice about their support operations before you trust them with your appraisal orders.

A member of PROvalUSA.com will be happy to discuss these options at any time, just visit us online at http://www.provalusa.com/ActiveRain/ or give us a call @ (866)243-7723, ext. 201.

Brian Blanchard is the Chief Operations Officer of PROvalUSA.com, the source for residential appraisals nationwide. The St. Peters, Missouri based company provides appraisal management with a modern twist. Since its creation in 2000, PROvalUSA.com continues to attract lenders to its unique open approach to appraisal management. For more information about PROvalUSA.com, visit http://www.provalusa.com/ActiveRain/ or call (866)243-7723 ext. 201.

The comments in this blog are solely the opinion of Brian Blanchard and are not necessarily representative of PROvalUSA.com's position on any particular topic.