If you’re in the real estate industry, you certainly know that the average time from mortgage application to closing has been hovering around 50 days. It’s not a point of pride or badge of honor for any mortgage, title, real estate or valuation firm. If anything, it’s been one of the most stubborn (and most publicized) blemishes on the image of the entire home-buying process. Much of that average time to close tends to pile up in the title and settlement stage of the process.
Even many real estate professionals can’t really tell consumers what’s going on during that period. But most understand that there are a lot of phone calls, emails and texts exchanged. More than a few real estate agents have come to dread calling the closing company to find out when they can close. Loan officers dread having to email an appraisal firm for the report they’re waiting on.
Title agents dread being blamed by everyone from the buyer to the seller, from the real estate agent to the lender, for that delay that falls between the signing of a sales agreement and the signing of the closing documents.
We’re in an automation revolution
We’ve been in the midst of an automation revolution for some time now. Our industry as a whole has made tremendous strides in that regard. A potential homebuyer can today apply online and possibly be approved in minutes. More closings are happening remotely via convenient, digital processes. Consumers can tour a potential home without leaving their own living rooms. Yet, what’s often most remembered is surprisingly not the moment the keys are exchanged. It’s the unending back-and-forth from business to business and the waiting.
We can start with the little things
Status checks between different firms. Missing information that’s required to process the loan or finalize the closing. Small but vital tasks that fall through the cracks because someone didn’t get an email or went on vacation without others knowing where that task stood.
It’s also the sheer volume of questions asked and answered in the course of an extremely complex process and the typical consumer’s extremely limited understanding of that process. Also adding to the pressure to streamline is the overall economic trend toward nearly instantaneous, do-it-yourself purchases (a la Amazon), virtual tours for new listings and even a rise in FSBO listings. Consumers (and real estate professionals) are increasingly demanding that their transactions be conducted quickly, whether they involve socks, new cars or houses.
It’s also things like wire fraud, its potential, and some of the less effective or manual means of combatting it. It’s traceable to overuse and misuse of phones and email as project management queues and order-entry portals. In many ways, that 50-day turn time can be traced to the way we communicate with each other.
Does anybody inside the industry truly believe that a 50-day average is the best we can do, or that we’re making any more money because of it? Most likely the converse is true. While there’s not a single silver bullet out there to eradicate the root causes of that wasted time, knowing the cause of several of these inevitable delays is a great start towards streamlining them.
Where automation can help
It’s easy to think that investing in technology can solve some of our biggest communications bottlenecks. Where the right technology is strategically selected and wisely implemented and used, it certainly can. It starts with the planning. Owners and decision-makers should not start their search with a technology in search of a problem, or the coolest demo, but rather with a thorough diagnosis of their own operations. At what points in the workflow and pipeline does the march toward closing inevitably slow down or even sit for days?
Odds are, you’ll find that, especially in the title, escrow and settlement phase of the home purchase, your biggest time traps data entry, data extraction or moving a part of the file from one system, company or technology to another.
Look for solutions that can help remove as many silos from the process as possible. If you know that most of your biggest broker clients strongly prefer to work with text messaging for communications, rolling out another smart phone app to communicate with agents—especially when they might already have 10 other title agency apps they need to log into every other day—may not be the best way to streamline effectively.
Where it takes more than just tech to streamline
Admittedly, every settlement services business is unique. They serve different markets with different rules. There are many unique situations making it nearly impossible to build a universally applicable technology to create truly seamless pipeline.
If you look around, you’ll see numerous examples of otherwise efficient and effective employees doing the right job with the least effective tool. How many of your employees tend to use their inboxes and email folders as virtual project management queues or for some other function they weren’t truly intended to be?
How many of your teammates are using their personal cell phones to text real estate agents, unintentionally creating a serious business risk by using a communications channel which is unmanaged and unmonitored? How many voice mails does your team leave for Realtors, consumers, lenders or appraisers on a daily basis? How fast—if at all—do they get a return call that resolves what drove their call in the first place? How do your new orders come in? If you’re like many title agents, you get some by email, a few through an app or your website, a couple by text and maybe even something in the mail. How do you manage to get all of that information from different sources into the same production platform?
It’s not a simple fix, but odds are, as an industry, we could shave days or weeks off of the time it takes to finalize the closing by rethinking how we do it at the tactical level as well.
It takes a human touch to bring the American Dream to light, no matter how much we automate. It’s a myth to imagine that Chat GPT or Blockchain or some other technology will eventually automate the process 100 percent. Buying a home is a major event in many people’s lives. Most will wish to look to a knowledgeable source and experience human interaction at some point when buying or selling a home.
We’d be much better off, however, by reviewing our workflows and how we perform them. By attacking the many seemingly minuscule time wasters and introducing better means to-communicate—or even eliminating altogether the need to communicate in some places—we’ll improve the real estate transaction.
Hoyt Mann is a co-founder and president of McKinney, Texas-based alanna.ai, a conversational AI assistant for title agents.
This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.
To contact the author of this story:
Hoyt Mann at [email protected]
To contact the editor responsible for this story:
Tracey Velt at [email protected]