Do you find technology useful? Erin Finke of The Yi Team at Fairway Independent Mortgage and Alex Ross of Ross Residential, explain the technology pros and cons in the mortgage and real estate industry.
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Scroll down for the podcast transcripts.
All right everyone, Happy Friday! We’re doing this podcast a little later in the week. Erin was on vacation in Jamaica.
I go to Montego Bay. It’s good to reset and get out of the business for a bit. I truly shut down. Although there is wifi, I don’t get email and try to stay off the internet. It takes a lot to prepare to leave on vacation, and then a lot to catch back up when I get back.
Great segue! Today we’re going to talk about technology pros and cons, apps and programs that we use in the real estate and mortgage industry. Let’s start with email and uploading documents.
Before 2009 everything was paper. You had to fax documents. Or people would come to the office. Or we would send documents via UPS or FedEx. Lots of sticky notes and highlighter. Sign here, sign there.
In 2011 we started moving towards less paper, more technology, more environmental saving trees.
Now the process is more simplified. If I can sign something electronically it’s less to print, sign or scan. It’s also easier to go back and read it. Easier than trying to find it on paper because you have a soft copy of it.
Different generations and groups may not like that as much and prefer paper. Younger generations have grown up using apps like this and are comfortable with it.
From the mortgage side we can do almost everything 95% electronically.
What can’t you do electronically?
There are a couple of documents that the social security administration does not allow us to use electronic signatures. It used to be that the IRS didn’t, but the allow electronic signatures now. There are a couple documents that you need to hand sign, or wet sign, and of course at closing.
They need to verify that you have a pulse and are a live person. They have those certifications that are back up documents.
DOCUSIGN
For those of you who don’t know what Docusign is, it’s a program that lets you sign things electronically. So your purchase contract can be done with Docusign. You have to go through and click every spot you have to sign. You can add anything on Docusign that requires a form to be check marked, initialed or signed. Like addendums, contracts, change orders.
Docusign also shows you how many trees you’ve saved. The environmentalist in me thinks, oh how nice!
It can be really quick, versus saying here’s a PDF. Print it, sign it, scan it back in, put it in an email and send it back to me.
INTERNATIONAL REAL ESTATE
Realtors still need to do that for international sales. Not all countries are able to get our email. For example, certain parts of China, they won’t get links. The email shows up a month later, or our link is blocked. For China I have to FedEx documents and have them sign it. Buyers have to go to the consulate and have it signed and witnessed. That’s a whole different thing. thank goodness for Docusign. Let’s get back to the technology pros and cons for the US.
DOCUSIGN PRO AND CON
People can log in, they view it, they click and they’re done. This makes it really simple so that’s a technology PRO. Technology is a pro because it cuts down on resources, on time, and makes things faster.
The CON to it is if you don’t have someone to explain to you what you’re signing in advance, then you’re going to spend a lot of time reading it as if it was printed out. People have questions and they call. It’s just easier if the professional is there to explain it. So that’s a CON.
If you know what you’re signing then it’s very fast.
Technology has to come with some preparation. For example, I would tell a borrower I’m going to send you a Lock In Agreement. The Lock In Agreement shows you what the terms of your interest rate lock is. It will say the lock started this day, and the expiration is this day.
Versus having a borrower read the verbiage that can be really ambiguous.
And there are people who are just not comfortable signing things electronically. They just don’t want to. But it affects efficiency and speed.
For example we have a client who went under contract on Monday and they’re closing next Wednesday. That’s a 7 business day closing! They don’t have a choice. When they decided to make the offer and ask for a very short closing, we can absolutely accommodate that but here’s the thing, we need all of this information right now and we’re going to be sending you stuff to sign. Unless you can come in the office regularly, it’s smarter to use technology to speed things along.
Wow, 7 days! They must not have a very complicated deal?
Well, I can’t say that it was simple, there was a lot of work that we did up front.
If you don’t have to source multiple things..then it’s easier.
When someone even asks to close something that quickly on an existing sale, there needs to be a very tight file. The title company needs to be on board too, because sometimes we’re just held up with title.
Those people might not have won that contract if they hadn’t been so competitive on their closing date, so that’s a pro.
I think another pro and con, is tracking people who can open it and who have said they’ve signed it. I can say, on page X you still need to sign.
Yesterday we had a very similar situation. There was a couple who are buying a property together. I can go in and view that I have signed the documentation, and she has signed the documentation. But I could see that he hadn’t signed it. I can do a screen shot and show him where a signature is missing. So it allows everyone to stay on the same page.
APP
Fairway Independent Mortgage also has a great app where you can apply for a mortgage, upload all your documents, see where you are in the process the entire time. We always have that personal touch of human communication, but there are some people that just like to refer to something. They just want to look at an app, so that’s good technology.
I know I can always go in and see, even here in the conference room. I can open the app and see any loan that I have in the pipeline and see exactly where it is right now. It’s great for me if I’m out on the road or in appointments outside of the office and I get a call from someone. I know I can’t answer off the top of my head. I can just refer to the client’s file in the app, and you can see that they’re all listed right here. So that’s a pro for me that keeps me organized.
Let’s switch this and talk about consumer end, like the home search apps, which shall not be named. The problem with these apps is people can go in and change information, and sometimes the information is not accurate. The HOA fees can be changed, whatever. So we get a phone call that says this website or this app says this, but whatever docs you sent us says this. I have to tell them, ours is correct. Sometimes I have to call those websites and ask them to correct an address. There is the convenience of having access to this information, but the con is it might not be accurate information on the home search apps.
MORTGAGE CALCULATORS
You know what I always hear about? The mortgage calculators. For example, a client will tell me that on a certain website or app they put in their information and this is what it said their payment would be. Haha, you guys can’t see Alex but she’s sighing.
If you can put in a lot of information it can be a good tool (SOME OF THEM) can be a good tool, to understand where you payment would be. It’s a ballpark. Say it tells you your payment would be $1500 or $2500 per month. You can look at that and see where it would compare to rent.
I had people just a few weeks ago that were doing numbers on a website. They thought their payment was going to be $1500 and this whole time they had been searching on their own. Without talking to a mortgage professional. They had been looking for homes for months and months, trying to narrow down the type of property they wanted. And guess what? That mortgage calculator didn’t include their taxes, insurance or mortgage insurance. They spent this whole time…
This is where you need to put a ballpark. If you know where you want to live in a certain neighborhood, then you can put a ballpark in as far as taxes. If your taxes are going to be $5000, then put that in. Look at the houses that you’re looking at. Then look at what the taxes say. Go a little higher. And the interest rates that you see today, go a little higher.
Definitely do a cushion so that you’re not let down. People think that if they plug in a purchase price then the calculator is going to give them accurate information. There are some great calculators out there, but at the end of the day, you need to know everything that goes into that calculation. As a regular consumer, without talking to a mortgage professional, you wouldn’t know. These calculators can be good for principal and interest payments. But remember, there’s more to your mortgage, or more to your housing expense than principle and interest. There’s HOA, property taxes, mortgage insurance. What if there’s a benefit, or special assessment? Or a private utility company? There’s a lot of things that can come in to play.
Use The Yi Team mortgage calculator and resources.
TECHNOLOGY PROS AND CONS
In general I think technology is helpful. Like now, we’re using technology right now. This podcast would not have been possible before. We would have had to go to a studio, and now we’re just using an app.
I’m an advocate for technology. There just needs to be an understanding about what comes with it. Don’t go with blinders on.
Tell us what you think. Do you like using technology or would you rather sit down with someone and sign all your documents by hand?
SECURITY
If you are going to use an app to upload your documents make sure that it is secure and use that two step authorization. That way, every time you log in it requires a passcode.
Our software on our Fairway computers, when we go to log in, it take a two step authorization. Everything we have has a two step authorization. That’s about it for Technology Pros and Cons.
HOW DO YOU TAKE YOUR COFFEE?
So how do you take your coffee? Let’s check our Facebook page (click here).
Mike Herson says “want my answer?”
Lee Kalt says “Cuban”
Cuban?! Yum!
Whats Cuban?
Shout out to Black Coffee on MacArthur Boulevard in DC.
I think we should taste a variety of coffees.
Let us know and shout out to Lee Kalt, who takes his coffee Cuban style.
Technology Pros and Cons.
For more about Contract Contingencies and how they can protect you as a home buyer or home seller, check out this podcast.