Mortgage brokers, do you want to increase your mortgage closing rates? The key may lie in knowing the property value sooner.
In some cases, brokers still wait until a deal is committed to order a full property appraisal, only to then find out that the value is not there.
By this point, a lender partner might be involved, and the client has likely spent hundreds of dollars on an appraisal — not to mention the time you spent on underwriting. And all of this will have been for naught.
Why do some brokers still choose this approach? It could be because:
- This is the traditional way of processing a mortgage application and the internal may not have been updated yet.
- Budget conservation — some brokers could believe processing the application in this sequence is the least expensive method.
However, just because this is how it has always been done does not mean it is the best way anymore. Technological innovation has made way for efficiencies — both in time, and in budget.
Brokers who have integrated Automated Valuation Models (AVMs) into their process are seeing that it has led to a competitive edge because:
- Deals that lack value are identified quickly.
- This leaves you providing more professional services to your clients (many of whom have no idea what their home is worth).
- This also enables you to avoid submitting bad deals to lenders – improving relationships because your closing rates will be higher.
- Deals that have more value than anticipated are found sooner.
- What is better than an upsell opportunity? Waiting for an appraisal to find out there is more equity means having to upsell the client later, adjust the deal, and have your lender partner spend time making adjustments on their side. When you know this sooner, this process can be much more fluid.
- Other property information is validated early on.
- Other things an AVM can reveal at the application stage include all legal homeowners, registered mortgages, and aerial imagery.
- All three of these are critical because they can uncover flags, such as undisclosed homeowners who will not sign; mortgages that are higher than indicated; undisclosed mortgages; and strange things about the property and surrounding structure that can stop a deal in its tracks.
The AVM is also a sales tool because a client who is on the fence can be persuaded by seeing that they have more equity than they thought they did.
While the traditional method of mortgage underwriting has been to commit to a deal, and then order an appraisal, that simply is not the most effective or efficient method anymore.
A better approach is to find out the estimated property value — and other critical information — before committing to the deal. This will save your time, your lender partner’s time, and your client’s time, and, ultimately, save you money because only the deals that are most likely to close will make it through.
If necessary, you can order a full appraisal afterwards to confirm the value and discover other details about the property that only an in-person appraisal will reveal.
Purview’s property data tools allow brokers to validate information, including property value, at the mortgage application stage.
Access a comprehensive, up-to-date AVM, ownership records, registered encumbrances, and more all using provincial land registry data.
Get started today. Contact Purview by calling 1-855-787-8439 or visiting www.purview.ca.
Purview is just one of Teranet’s Financial Services Solutions; stay tuned for our upcoming portfolio unveiling!