Tomorrow is April 1st and I am sure there will be a significant number of “April Fools” shenanigans for us to be amused or victim of. Unfortunately, there is one significant “prank” being played on the public, and that is the mass marketing of a ten minute, online pre-approval. Yup, a computer program and the client’s personal information and before you know it, you are ready to go out and make the biggest financial commitment of your life!
Let me ask you this; what has been your experience with making important choices online? Now before you answer, let’s get clear that we are not talking about buying something we have had experience with where the product is exactly the same regardless where you go; we are talking about a situation where people often don’t know the answers to specific questions or have no idea what options they may have! While many people think getting preapproved for a loan is the same thing no matter where you go, the reality is really very different.
Why don’t we look at a few scenarios to see if you agree? Have you ever shopped for a car? Did you know exactly the make and model car you wanted? Were you clear on all the options? Did you just go online to a website and pick everything you wanted and clicked a button and ordered your car? Or did you physically go to the dealer and look at the cars? Did you sit in the car? Did you test-drive the car? Did you see what options they had and were they worth the price you were paying?
How about using an online dating site? After reading the profile and looking at the pictures, did you agree to meet this person? When you met them, did they look like their picture? Did they act and sound as they described themselves? Was your interpretation of their information represented by the actual person that arrived?
Some people think they know exactly what they want. Some people don’t realize until they get very specific and very real with the numbers that what they want, and what they get can be far different from what they really need or can really afford!
How many times has a customer come to you looking for one thing and done another? When was the last time a prospective client didn’t really know how much money they made or what their obligations really were? Is an algorithm really capable of asking all the questions, understanding the answers, asking additional questions to clarify the situation and then make a determination as to the proper course of action? And if this is true and people really aren’t needed to work the process, are these companies really going to terminate all of their workers? Obviously not; what is going to happen is, some people will get the proper answer and go on their way. Many other people will either be denied or approved incorrectly. And is this what the industry needs? Ten minutes to rocket your way into the wrong choice?
Is the preapproval process the place where speed matters? Isn’t the beginning of the process the place where we should be taking our time to be sure the client understands all of their options? Isn’t this the time to be sure we have all the information or help prepare the borrower to be the best possible borrower they can be? Speed is a wonderful or a dangerous thing. You can get married in Las Vegas for $25 and in 15 minutes. However, a divorce will cost quite a bit more in time and money! You want speed in the loan process from contract to closing!
So in honor of “April Fool’s Day”, be sure your referral partners understand the value in a full document preapproval consultation. Be sure your clients aren’t fooled by using their speed at the beginning of the process where real danger can be found, and take their time up front so the speed in the transaction can happen when it really matters, after they fall in love with the home and want to close and move in! No need to rocket your way into the wrong product or the wrong terms, or maybe even no loan at all!
Questions or comments: Mike@IMTcoaching.com