EXCEPTIONAL CUSTOMER SERVICE IS AN IMPORTANT FACTOR AS YOU CONSIDER A LENDER.
Many lenders have focused their strategy on providing discount experiences with bargain rates at the cost of a personalized and outstanding experience for their clients. The savvy investor, however, keeps in mind the relationship they hope to build with their funding partner and the hospitality they provide throughout the funding and servicing experience.
Functionally, the funding process represents less than 6% of the average lifespan of an investment loan with a lender. Why would you want to work with a lender who shops out the other 94% of time servicing your loan to a third party? A third party who is unfamiliar with you and the specifics of your deal?
Building a relationship with a full-service lender allows them to view the entire circumstance of your deal and portfolio holistically, focusing on you and not just the quantitative values of your project.
With the homogenization of lending partners around volume-based lending, customer service becomes an increasingly pivotal factor in the decision-making process of real estate investors. Investors should continue to scrutinize the relationship they hope to build with their funding partner, considering some of the following key differentiators.
Personalized Communication
In the digital age, personalization is key. Borrowers expect communication to be tailored to their specific needs and situations. Lenders can achieve this through advanced customer relationship management systems that track borrower interactions and preferences. For example, automated yet personalized emails, text messages, and phone calls can significantly enhance the customer experience. Lenders should also attempt to provide multiple communication channels, based on your preferences and other situational requirements.
Transparency And Education
Transparency in the lending process is non-negotiable. Clients demand clear, honest information about loan terms, interest rates, fees, and the overall lending process. Lenders who provide easy-to-understand explanations and break down complex financial jargon into simple terms build trust and confidence. Borrowers should look for lenders offering educational resources such as webinars, guides, and FAQs that can empower borrowers to make informed decisions.
Speed And Efficiency
In the fast-moving modern world, speed is crucial. The rise of AI technology and the proliferation of more mundane systems within the industry have set high standards for fast and efficient service. Lenders should be leveraging digital tools to streamline the loan application and approval process. Automated underwriting systems, online document submission, and real-time status updates can significantly improve transparency and speed of execution within the funding process.
Technology
Along with speed, the integration of technology throughout the client relationship is a hallmark of outstanding customer service. Investors should look for lenders who prioritize using technology to highlight the status of a loan, whether during the loan process or after funding. For loans that have a construction component, borrowers should look for a lender that prioritizes the ease of requests for draws, payoffs, or information through an online portal and helps to onboard new clients into their systems at the time of their funding.
In-house Servicing And Fund Control
With more relationships and services than ever being outsourced to third parties, real estate investors should prioritize lenders with in-house servicing and fund control to ensure a streamlined handoff from funding.
Keep in mind the context of your loan across departments (and, even more importantly, across your portfolio) as maturity is approaching or budgets get tight. This structure has grown uniquely in the current hard money lending environment, where many lenders outsource these critical functions, often leading to fragmented service and increased risks for the borrower. By choosing a lender with in-house servicing and draws, investors gain a reliable partner who can offer more personalized and immediate responses to their needs, ultimately enhancing their investment portfolio’s success.
Feedback And Continuous Improvement
As the final step in the lending pipeline, outstanding customer service involves actively seeking out and acting on borrower feedback. Lenders should implement regular surveys and feedback mechanisms to understand borrower experiences and identify areas for improvement.
These could come in the form of post-funding/payoff CSATS or in-person borrower feedback studies. Regardless, demonstrating a commitment to continuous improvement by collecting and acting on this feedback shows borrowers their opinions are valued and their relationship with the lender is taken seriously.
In 2024, outstanding customer service from a lender is characterized by personalized communication, transparency, speed, proactive problem-solving, technological integration, and a commitment to continuous improvement. Lenders who excel in these areas not only meet the expectations of todayís borrowers but also build lasting relationships based on trust and satisfaction. As the real estate market continues to evolve, the importance of exceptional customer service will only grow, making it a crucial differentiator when choosing your lending partner.
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