Attn: Mortgage Brokers and Agents: Automated Valuation Models and How They Impact You

Your plate is full. As a mortgage broker or agent you yourself are charged with the task of running your own little business. This means marketing, sales, customer service, underwriting, administration and more… We know, we’re preaching to the choir.

Being primed to manage the highest volume of business means being as efficient as possible. One way to do this is to have measures in place to:

• Identify new mortgage opportunities within your portfolio or an upsell opportunity on a deal
• Perform due diligence quickly and avoid bad deals
• To be better aligned with your lenders, reviewing the same information that they do through the application/underwriting process

All roads lead back to automated valuation models. There are many different types of automated valuation models that are used by both lenders and insurers. Automated valuation models are mathematically-based computer programs that produce an estimate of the market value of a residential property based on: public record data, property location, market conditions and real estate characteristics.

Lenders use automated valuation models for many reasons, but one primary reason is to validate a property’s value. Just like your closing rates with your lender matter, your lender’s closing rates with their insurer matter. Professionals recognize that time lost on bad deals not only causes financial losses, it can also damage relationships.

Most lenders use AVMs, even when they also use appraisals, and even when the deal has to go to the insurers. Automated valuation models can be used alone or together with an appraisal.

Looking back to the beginning of this blog, automated valuation models are a measure you can put in place to:

Identify new mortgage opportunities:

• Running AVMs on clients who are mid-term may identify areas where properties have seen a considerable increase in property value. This may present refinance opportunities like a HELOC or a second mortgage.

Vet new applicants:

• Running an AVM on a new applicant can both:

o   Flush out a client applying for a mortgage on a property that is not worth the stated value saving you valuable time and also;

o   Identify applicants who have more equity than they think, meaning you may be able to pitch an upsell – larger mortgage or a secondary product.

Automated valuation models strengthen lender relationships. Using an AVM that is commonly used by lenders means that you will be aligned with your lender when it comes to viewing relative information. Purview, for example, offers a product to lenders and mortgage brokers/agents. This means if the same criteria were entered, the lender and broker, through viewing an AVM, would see a similar result in terms of the value produced. Catching deals before they get to your lender saves your lender valuable time and cost, which they certainly will appreciate.

Because AVMs are so widely used by lenders, brokers and agents can’t afford to not acknowledge their existence, impact and value. Purview For Mortgage Brokers makes creating this alignment easy. Contact us today at 1.855.787.8439.