Real Estate NewsTaking The Impersonal Touch Out of Cyber-Lending
Shopping for a mortgage loan on the Internet has become a common practice for
many home shoppers in our world of immediate gratification and instantaneous
cyber results. It gives the consumer some idea of what is available to them
and allows them to somewhat anonymously test their qualifying mettle by
stating generalities about their financial histories. With presto-change-o
speed, they can have a cyber loan pre-qualification in a matter or minutes or
hours after inputting a modicum of information.
But something is missing from this picture that has many a buyer signing off
before accepting the terms, so to speak, namely; a voice, a face, and a
handshake. Recent National Association of Realtors statistics show that it
is estimated that although 25% of consumers visit the Web to shop for a home,
about 18% of them use online findings only as an information source.
Americans, no matter how sophisticated, still seem to value the personal
touch, especially when big numbers are at stake. Predictions of the demise of
the small, local mortgage companies have been greatly exaggerated since the
emergence of online lending. Now finding a unique way to serve the consumer
with a local, personal touch, yet garner the power of the Internet is a type
of online lending site with a twist, called ApprovedBuyer.com.
The brainchild of two young entrepreneurs with degrees in finance from fine
southern schools, Martin Wareing and James L. Moncrief, the Approved Buyer
Network was a start-up in 1997, after both had spent several years in
mortgage lending in Orlando, Florida area. The concept of combining Internet
technology, local lenders and referred Realtors evolved from their experience
in trying to find a more efficient and less costly way to assist homebuyers.
They liken their operating philosophy to that of an HMO, believing that if
they based their services on operating in a cost-controlled environment, they
could ultimately serve the consumer better.
Their service and concept is fairly simple. Buyers go to the
ApprovedBuyer.com Web site and register, making them members of the Approved Buyers Club. They cue in a desired loan amount and just a bit more
information, as well as the vicinity where they would like to buy. They are
then matched up with a local lender in that area. They may meet their loan
consultant in person, do business by phone, fax, overnight service or
Internet, but are not at that point dealing with the disembodied lender in
cyber-space. A needs-list of documents will be generated by the lender that
the borrower must furnish for a full loan pre-approval. The site will
generate estimated closing costs based on that lender"s local costs and fees.
Once a pre-approval is achieved, the buyer is then referred to a local
Realtor in that area, and contact is made by phone, or, if geographically
possible, in person. The Realtor then begins shopping for their client"s
home. The local Realtor and buyer are armed with the power of a full
approval and not a mere pre-qualification, which oftentimes makes home
sellers and their representing agents uneasy when taking a home off the
market once an offer is accepted. If the buyer registers with the Approved
Buyers Network and allows them to refer them to a Realtor to purchase their
home, they will receive a credit of up to Ѕ% of the mortgage amount (referred
to in the site as the Gold Plan). If the buyer allows the Approved Buyers
Network to refer them to a Realtor to sell their current home as well as
purchase their new property, they can receive up to 1% of the loan amount in
credit (called the Platinum Plan). There is no cost to the buyer who
registers on the site, but Realtors and lenders pay a nominal fee to become
participating members of the network.
"So many buyers get side-tracked when they decide to buy a home by thinking
they should call a Realtor first, get briefly pre-qualified, and then find a
house and make an offer," says founder James Moncrief. "Getting a
pre-approval through ApprovedBuyer with the local lender they will use to
purchase the home creates tremendous credibility with the home seller when it
comes time to make the offer. And they have the peace of mind of working
with a local, knowledgeable lender and Realtor no matter how far away they
are from the area in which they wish to purchase a home."
All referral fees, costs and buyer credits are disclosed in the final
paperwork at closing time, so that the consumer sees exactly what took place
in the transaction. Unlike a cyber-lender, Approved Buyer Network lenders
can continue to have a relationship with their borrowers, as can the local
Realtor referred.
Using the Internet as a conduit and resource, but putting a personal touch
into the process of getting a loan and purchasing a home, ApprovedBuyer.com
seems to blend the high-tech aspect into the equation without sacrificing the
emotional, hand-holding attention many consumers need during the process.