What gets a person really anxious? How about spending more money on a single purchase than he or she will likely earn over the next seven or eight years? How about having to provide detailed documentation, showing the address of every home one's lived in since college and every job one's held, including the salary ranges, length of service, and names and addresses of home offices and bosses? And what if we said this information was due, say, by tomorrow at 5 p.m.?

As nerve-wracking an experience as this can be, home builders ask buyers to endure it all the time. How, then, do some builders end up with vastly different finance satisfaction scores than others? What do the best builders do to assuage buyers' anxieties and convert them into evangelicals?

Mostly, your customer wants to feel smart, so teamwork at the financial stage works in two directions, for you and your customer. The finance experience–which encompasses the loan and escrow/settlement processes–hasn't traditionally been on the radar of many builders' customer satisfaction efforts. The reasons:

  • Lenders and escrow service businesses often are vendors, beyond conventional builder accountability. Outsourced vendors haven't traditionally emphasized a customer's experience.
  • Sales, customer care, and construction issues tend to take precedence over finance because builders believe they have greater impact on satisfaction and referral rates.

But builders and their partners who create initiatives especially to enhance buyers' finance phase experience clearly see their value. Rick Kersenbrock, western region manager for First American Title Co., has committed his escrow services division to a customer-care approach. "We started looking at Eliant's [customer care] process about two years ago and are adopting it throughout our California branches," says Kersenbrock. Results are coming in strong (see "Title shift," page 30).
INCORE, a Laguna Hills, Calif.-based financial services organization offering loans and design center services to home builders, strives for a reputation as the Nordstrom of the industry. To distinguish itself in fiercely competitive Southern

California, INCORE trains loan representatives and design center personnel "to delight–not satisfy," says Bob Dalsimer, INCORE principal. "I have builder clients who make decisions on primary lenders based on more than just rates and terms. They hire us because they know we will give their buyers an extraordinary experience. Since all lenders have the same rates, it's the best way I have to differentiate my firm."

To reduce stress levels during the new home purchase process, INCORE clients receive ongoing status reports and alerts to remind them of timelines for document submission.

Teamwork Rules

As in other phases of home buying, customer comfort hinges on you welcoming them fully into the finance process.

  • Identify the finance team: sales, design center, options, escrow, and mortgage representatives.
  • Script out customer interactions and hand-offs among team members.
    *Include a list of planned surprises you will provide to buyers, beyond the call of duty.
  • Develop a customer overview early in the process that spells out all touchpoints, timelines, hand-offs, and realistic expectations.
  • Share information freely among team members.
    * Salespeople should convey buyer financial info to the finance specialists;
    *Design consultants should pass timely information to finance people to ascertain buyer's budget constraints and ensure accuracy and timing of deposit;
    *Avoid the blame game among sales, lender, and escrow associates by striking a unified, coordinated balance.

Since your buyers want to feel smart about all the money they are committing to the purchase, they need to trust that you and any financial partners are in sync with what's best for them.
So, pay attention to the basics:

  • Contact each new buyer soon after purchase.
  • Explain the purpose of escrow account; buyers seldom understand this process.
  • Set clear, realistic timelines and promises about the finance process.
    *Only promise that which you know you can overdeliver on. n Present escrow and lender as seamlessly aligned.
  • Communicate frequently with the buyer via phone, e-mail, fax, or face-to-face. Brief voicemail status reports work well to keep buyers up-to-date; at the same time, this method shows that you can be trusted to look out for the buyer's best interests.

Extra Tip: All expectations and promises should be set at a level you can easily beat. "We will get you written loan approval within 18 days" is realistic because you know you can almost always get this approval in 12 days. BB
–Bob Mirman is CEO and Alex Roqueta is president of Eliant in Irvine, Calif. For further info, visit www.eliant.com.


Expectations 101: The Finance Phase

Below are points to emphasize to buyers:

  • You will be asked for more information than you think is necessary or reasonable
    *Lenders have different criteria that often make little sense to consumers
  • It is absolutely critical for you to meet deadlines and respond quickly to requests for documentation
    *Many factors, including loan locks and a timely closing, are dependent on your responsiveness
  • You will need to take time off work to meet with your lender and escrow/settlement personnel


All For One

Customers search constantly for a lender distinguished for having the best numbers. Capital Pacific Homes of Southern California (CPH) takes a different path to creating value. It differentiates itself by improving customers' lender experience.

CPH execs believe quality of service improves if lending and sales units work as a unified team. In less than a year of working on coordination, the division's loan and closing process satisfaction ratings shot up from 71 percent to 94 percent. "It all started with listening to what our customers were telling us," says Margarita Tom, escrow manager for CPH of Southern California. "The direction for change became strikingly apparent."

CPH realigned sales reps to work more closely with loan representatives. Between them, they share more buyer information at earlier stages of the process and increase face-to-face meetings. "There is a genuine rapport between our lender and sales reps," says Tom.

"Sales has come to find that heightened support of the lending function is in their best interests. Overall customer satisfaction increases, and the closings run much more smoothly."

In addition to satisfying customers, this approach is attaining capture rates as high as 95 percent in some communities.

"You need to make sure that there is a good fit between team members," says Ric Hernandez, vice president of sales and marketing for CPH. "Our first step centered around a very purposeful 'match-making' of our lender reps with our sales reps. Whenever we observed extraordinary team chemistry, what followed was undoubtedly an extraordinary customer experience."

CPH invites home buyers to a complimentary pre-closing luncheon to meet its team. "This event gives us valuable face time with our customers, as well as with our teammates," says Cort Haymund, manager of CPH's lending subsidiary. "We're able to offer a consistent message to our buyers, outline important upcoming activities, set critical expectations, and share the essential tips we know will lead to a great customer experience."

Ongoing improvement is a priority for CPH division president Scott Coler. Monthly, he holds a brainstorming session involving all customer-facing departments and field reps. "Superior ideas are generated when they come from a group that is seeking collective improvement," Coler observes. "Ideas coming from this group environment translate into a smooth, seamless process for the customer."


Put A Face To A Name

E-mail has its place in the business world, but it may not be the best way for lenders to contact buyers. Chris Canaday of Canaday & Co. realized that when he studied previous customer habits and saw that the more a lender team relied on e-mail as its principal method of contact with buyers, the more those buyers felt alienated–and vice versa.

That fits with research by Eliant on how customers rank methods of interaction that engage them. Listed from best to worst, they are: face-to-face; a telephone call; an informative voicemail; a handwritten card; an e-mail; a fax; and an impersonal form letter.

Canaday wanted a lender that would provide old-fashioned customer service, setting his company apart in the crowded Southern California market. He and Dave Ross at First Mutual Mortgage came up with the idea of doing all substantive interfacing between lender and buyer face-to-face.

When buyers have questions or concerns, they request a face-to-face meeting. The loan rep makes himself available at a location and time convenient for the customer. The loan rep is present at all phase releases and takes all application information in person. E-mail is allowed but restricted to matters most convenient for customers. As a result for many communities– with no incentive to buyers–Canaday & Co. has a preferred lender retention level of over 90 percent.


Title Shift

Two years ago, at First American Title's builder-services division in Santa Ana, Calif., an escrow experience based on passionate customer care emerged. After holding several focus groups with John Laing Homes' management team, First American's vice president and branch manager, Vicki Hinkle, implemented a simple shift in team consciousness, one that improved the experience for John Laing's home buyers during the escrow process.

smartmoney.jpg CLOSING IN ON CLOSINGS: From 2000 to 2003, buyer satisfaction with the loan and closing process declined. Builders tend to concentrate on improving the buyer's experience with the purchase and customer-care experience, not the finance process. In 2004, builders started moving in the right direction and customer satisfaction scores with the finance experience started to improve. *data representative of customer satisfaction with eliant builder clients; Source: Eliant Move-In Survey 2000-2005 "Our most significant change was our smallest one," recounts Hinkle. "We set out to redefine the escrow process by shifting the primary focus squarely onto the customer. This small shift in our perception dramatically altered the entire experience for our customers," she added. "Basically, we've redefined our perception of our customers. They are no longer just a part of the process: They are the reason for it. We made the customer the heart and soul of the process, and this single adjustment has had a profound and positive effect on the experiences of these home buyers."

The First American escrow team also set out to transform its process and communication strategy. The first move was to begin escrow communication with the buyer earlier in the process, right after the purchase date. According to Hinkle, "Right from the start, we take the time to immediately educate the home buyer about the entire process of escrow. We outline what is expected of them and set realistic expectations and timelines. It makes a world of difference for them, and they let us know it."

First American developed a new customer advocate position as well. This person provides the home buyer with an on-site opportunity to resolve any questions that arise during the document signing.

Customers leave the closing table with confidence that they have addressed all their issues and the acknowledgement that they've been heard and respected.

Learn more about markets featured in this article: Los Angeles, CA.