Covid-19 has been a great equalizer. Regardless of industry, it has affected just about every business in some way. Some have had to cut staff, amend their hours or rethink their whole business model. Remote workforces are now the norm while the number of employees working in an office has dwindled over the past several months. Prior to March 2020, I'd bet that a large number of Americans weren't all that familiar with Zoom or Microsoft Teams, and probably even fewer relied on them for everyday communication.
The country's real estate and lending industries weren't spared, either. As concerns grew about the transmission of the virus and its potential impact on the housing sector, companies scrambled to maintain operations. That proved to be tough with increasing health guidelines and social distancing protocols. For example, some real estate agents didn't feel comfortable physically showing properties, or they weren't allowed to. Appraisers largely hit the brakes on traditional inspections and homeowners looked for new ways to close on a home without sitting across from a stranger. Meanwhile, banks and lenders worked behind the scenes to keep their pipelines flowing, even as branch locations were inevitably shuttered.
These events shined a spotlight on a long-standing issue within the mortgage industry: the need for more modernization, specifically the manual processes and those where personal interaction is currently necessary. As this need becomes more and more glaring, technology is being tapped to address consumers' concerns. In some ways, you could say that the pandemic has caused some much-needed acceleration in advancing the industry as a whole. However, it's imperative that we take the lessons we're learning from this ongoing event and use them as a blueprint for success in the future.
Since last March, we've seen significant evidence of adaptation. When face-to-face contact has not been an option, real estate agents, home inspectors, appraisers and even signing agents have turned to technology to bridge the gap. FaceTime, Facebook Live and similar tools are being leveraged in greater numbers to help agents safely show properties in real time. Home inspectors are also being encouraged or asked to record their inspections to later share with the buyers. The pandemic also changed some of the requirements surrounding appraisals, as the government-sponsored enterprises (GSEs) moved swiftly to accept alternative options, such as desktop and drive-by appraisals to reduce or eliminate in-person visits. In these ways, the consumers' needs are still being met, although in a nontraditional format.
Buyers looking to close on their home are finding new options in lieu of a sit-down signing. This is the facet of the mortgage process that perhaps has seen the most aggressive overhaul. The National Association of Realtors (NAR) has been lobbying for additional support for real estate businesses, including remote online notarizations (RON). At the same time, lenders and service providers like us have been beefing up our offerings in this area, which were underutilized and lesser-known prior to the pandemic.
RON, or e-closings, connect a notary with buyers virtually in order to legally sign documents without having to meet in person. The Mortgage Bankers Association (MBA) reports over two dozen RON bills were introduced in 2020, and more than half of all states in the U.S. enacted legislation to allow RON-assisted transactions. In fact, some companies saw a 200% increase in RON closings. This is yet another example of how the industry is leveraging technology, and expanding on it, to meet a growing need.
In the same way that Zoom and similar platforms have become the go-to for communication, the aforementioned technologies and many other solutions will help shape the future of the homebuying process. In order for the whole industry to thrive in this changing landscape, I've identified four keys to success in our "new normal."
1. Make attracting top talent a priority.
With growing remote workforces, the candidate pool has expanded beyond geographical limitations. Take time to find the most high-quality candidates whose skills align with your company's goals and who can help you solve for these new challenges in the marketplace. Talent will be the differentiator, particularly in the fintech space.
2. Educate your consumers.
Real estate agents, appraisers, home inspectors, lenders and servicers should focus on explaining how Covid-19 has changed the industry. Make it a point to educate buyers and sellers on any new laws and what programs are available to them. This is a big opportunity to show your value, expertise and understanding of the market dynamics.
3. Embrace technology, but beware of the 'quick fix.'
Technology has been the game-changer in real estate, particularly over these past few months. While it is the key to pushing the industry forward, avoid Band-Aid-type solutions that temporarily solve issues. In other words, seek out tech solutions that are relevant now and into the future. Do your homework to ensure the company is reputable, has longevity and is committed to continual innovation.
4. Prioritize the consumer experience.
The pandemic has changed the homebuying experience, but one thing that hasn't changed is the need to serve consumers. Adapt strategies to meet the buyers/sellers where they are, and place a high priority on solutions/upgrades/policies that positively impact the consumer experience.