Over the past few years, lenders have primarily focused on the front end of the consumer experience at loan origination. Alan Frelix, CEO of The Closing Exchange, a leading vendor management and signing services company, says not enough focus has been placed on the back end of the experience—or what he believes to be the most important time for lenders and title & escrow companies to secure their relationships with clients.
We sat down with Frelix last week to discuss why he believes the closing experience is so valuable to solidifying consumer relationships, and how businesses can start creating a more personalized and flexible closing experience with the right technology.
The closing experience isn’t just a transaction, it’s a “ceremony”
“There’s research that indicates that consumers really value the ceremony of the closing experience,” Frelix said. This desired “ceremony” is typically an in-person experience that integrates knowledgeable experts and the right consumer-selected technology to create a streamlined closing.
More and more, consumers are looking for flexibility in their ability to choose how, when, and where they finalize their home purchase. According to Frelix, regardless of generational differences or technology proficiency, “the one constant that consumers are looking for is the right combination of information, interaction, and technology to create a streamlined closing experience.”
Traditional wet signings, hybrid eClosings, and RON eClosings, when do consumers want each?
While there’s no way to predict the type of closing experience a consumer may desire (especially as consumer preferences continue to shift) there are a few generalized circumstances when a consumer may desire a particular closing type. (For more background on the different closing types click here.)
- Traditional “wet” signings: Consumers who prefer this type of closing are typically people who are going through the homebuying experience for the first or second time. “We have to remember that this is one of the largest transactions in a person’s life, and it should be celebrated. First and second-time homebuyers want a more palpable and meaningful experience,” Frelix said. Additionally, he noted that high-net-worth individuals tend to desire a unique in-person wet signing experience with their private bankers.
- Hybrid eClosings: Consumers who desire this closing type are individuals who have been through the closing process before, know what to expect, and want to be a part of the process throughout the transaction. “They are typically looking for an expedited way to get information early, review the information, and be comfortable with the documentation before they sign,” Frelix said. He also pointed out that individuals who are tech-forward (spanning multiple generations) who are used to transacting electronically generally believe hybrid eClosings are just the way “things should be done.”
- RON eClosings: In general, RON eClosings are a circumstantial solution for consumers who can’t get into an office or have a notary come to them. “There’s been a big push for RON because this type of closing provides efficiencies for lenders,” Frelix noted, “however, from a consumer perspective, this type of closing isn’t necessarily preferred unless they are in an unusual circumstance that prevents them from using in-person options.” For lenders, RON eClosings are beneficial because the digitally-recorded documents are more quickly moved toward the secondary market.
In general, Frelix and his team at The Closing Exchange believe all closing types will continue to be “arrows in the quiver” for title & escrow companies; however, hybrid eClosings will most likely become the most dominant closing type. This is because hybrid eClosings benefit every stakeholder in the transaction. Lenders benefit from the ability to expedite the closing process and secure relationships with their clients; title & escrow companies benefit from efficiencies and improved quality; and consumers benefit from upfront information coupled with an in-person closing “ceremony.”
Adapting to consumer preferences requires the right technology
According to Frelix, digital closing technology has been around for some time; however, the industry is only now awakening to the value of creating a differentiated closing experience for their customers. Title & escrow businesses now recognize the value of finding the right technology partners that will empower their agents to meet the individual needs of consumers at closing.
This means that the technology must be integrated with a title agent’s workflows and software on the backend so that an agent can immediately shift to a consumer’s needs. For example, if a homebuyer needs to travel for work on short notice and can no longer be present at the signing table to close the deal on time, the right combination of service and technology will empower the title agent to seamlessly shift toward a RON closing.
For title & escrow businesses using Qualia, there are vendors within Qualia Marketplace that allow for a differentiated and flexible signing experience. The Closing Exchange is one such partner that allows businesses to create a memorable, “ceremony-like” experience for home buyers. With The Closing Exchange’s CXChoice™ platform, title agencies can instantly become e-enabled and provide customers with their choice on how to close, including traditional “wet” signings, hybrid eClosings and RON. To learn more about The Closing Exchange and other vendors available in Marketplace, click below.