Real estate is one of the last standing dinosaurs in the business sector. Nearly all other industries have made their products ultra-convenient, accessible, and user friendly. The modern consumer is keen on two things: speed and efficiency. When they want something, they want it immediately.
None of those words describe the process of getting a mortgage.
Instant gratification is the bread and butter of contemporary shoppers. If they find themselves at the mercy of business hours or labor shortages, they’ll seek out other options.
This is what separates the modern consumer from their predecessors. The convenience of the purchase is weighed just as heavily as the desired product. This trend of businesses embracing the digital age has been mutually beneficial. Companies get a wider reach while their customers save an abundance of time.
Employees used to shorten their lunch breaks and be forced to wait in line at their local banks to cash their checks. Today, they have comprehensive access to their finances from the comfort of a handheld device.
People used to drive hours to a manufacturer to purchase a specific gadget or piece of furniture. Today, they can get nearly any product delivered to their doorstep in under 48 hours.
The food, transportation, and retail industry were cognizant of this pattern and adjusted accordingly. GrubHub, Uber and Amazon are massively profitable because of their dedication to the necessities of digital commerce.
The products haven’t changed, and neither have we. What changed was the transactional process, which was enabled by the technological infrastructure of the business. Companies understood the value of end-to-end user experience.
Consumers don’t want to be pin-balled around to different pages and forms. The second they take out their credit card, each passing minute is a thorn to their side.
As a paying customer, the ideal transaction should be seamless. Every fraudulent finish line and futile form to fill is a deterrent to their experience, and ultimately long-term business. They don’t have to spend their money on your product, they’re choosing to, which makes them fickle. They hold the power, and they always will.
The mortgage industry is lucky they provide the basic necessity of housing. If they sold sandwiches using the same business model, they’d be out of business faster than you could say $5 footlong.
The entire experience is notoriously tedious. Many first time home owners are legitimately dreading the day they have to apply for a mortgage. They say their mortgage experience is similar to an “annual physical or going to the dentist.” Whether it’s the mountain of paperwork or invasive request of personal information, I’d say customers are merciful when comparing it to pulling teeth.
A majority of top mortgage companies are afraid of disrupting the status quo, and going digital because they don’t want to offend their traditional referral sources: the realtors. They don’t want to be perceived as attempting to invest in something that may undermine the realtors opportunities. However, they can only ignore the hand that feeds them for so long.
Eventually, the demands of the consumer will force change, but in the meantime, no company wants to be the first to jump.
The future of the mortgage industry aligns with the future of all other successful enterprises. One that marries automation and service. A user friendly end-to-end experience where customers can log onto a central hub, track updates, speak with a representative and refinance at the push of a button.
If the mortgage industry is able to accommodate the new generation of potential homeowners, they will see a substantial increase in prospects and revenue.
Attempting to own a home is obviously more complex than buying a sandwich, but the closer they can get to simplicity, the better.