A survey done by Spruce found that a growing number of homebuyers are frustrated by the closing process. Those surveyed highlighted the time the process takes as the main point of frustration.
According to Fannie Mae, from Aug. 2019 through Aug. 2020, the average time-to-close increased to 47 days.
Forty-five percent of those surveyed cited the time it takes to close as the most frustrating part of the process. Over 48 percent surveyed think real estate transactions are outdated.
The survey also showed that 82 percent of homebuyers agreed technology could make buying a home easier.
“By taking an opinionated and integrated approach, you can start to bring cycle times down not in every case, but on average across a pipeline,” Spruce CEO Patrick Burns said.
Burns said that this was the first year Spruce’s polling focused on technology and how it can help the process, though he also said this is not necessarily a new idea.
“The shift to digital transactions has existed for years, but as the pandemic forced us all online, the need has become much more apparent to those that had previously been skeptical. It’s now a necessity,” Burns said.
Optimization is the key to cutting down that 47-day timeframe, according to Burns. He said while no two transactions are exactly the same, using key indicators to streamline the process can be beneficial to everyone involved.
“Lenders can then start to optimize. How can ‘easy’ transactions be identified right at application, and routed accordingly? For example, there’s no point in putting a transaction at the top of the queue for underwriting if there’s a messy title issue that needs to be resolved,” Burns said. “Similarly, there’s no point in completing underwriting in record time if you haven’t already communicated to the settlement agent that they should be standing by ready to close.”
“It’s not just about keeping costs down and efficiency high for lenders, but it’s what borrowers want. In mortgage, the best borrower experience is one that doesn’t last very long,” Burns said.
Burns also cited communication and clear expectations as keys to a positive borrower experience.