Connections vs. Connectivity
By Charlie Elliott, Jr., MAI, SRA

A large part of the success of those of us who have a stake in most any industry is personal connections, or at least that has been the conventional wisdom for a long time. We have all heard that “it is not what you know but who you know.” It has not been unusual to hear that a successful person is “well connected” within a business or social community.

Even those of us who do not consider ourselves well connected in the figurative sense, usually, if we are honest with ourselves, have a deep down appreciation, if not envy, for and of, those who are. There is an art and significant benefit to becoming well connected and it is not the purpose of this article to “pour cold water on” such a noble virtue. To the contrary we are however going to discuss how this concept can be taken to an even higher level.

The mortgage transaction arena is largely dependant upon our ability to efficiently communicate with one another. This communication is not only a personal one but also a technical one given today’s high-tech environment. We live in a new world today, one that has changed drastically during the career of those of us who have worked in the industry for as few as 10 years.

As recently as in the early 1980s, the state-of-the-art order-transmission, acceptance, confirmation and recording system in most appraisal offices consisted of a verbal telephone conversation and a record made by hand, on a pink, 4 x 6 “While You Were Out” telephone message pad form. In our company this form was placed in a file folder and given to the appraiser as the only written record of the transaction. It was returned with the completed appraisal in the same file where the appraisal was copied, and the original was mailed to the client. This order form was used for a few years until it was replaced by a larger 5 x 7 Appraisal Order Form Pad produced and offered by an appraisal form supplier. Orders for services were handled in the same fashion for a few more years. In the early ‘90s this system was then replaced by such improvements as fax orders. Then came site based computerized order entry systems and our currently proprietary Web-based management system.

The system was, and is, made up of a large number of independent venders doing their own thing with little or no accountability or connection to the client. Those who think of the lender-services market of the past as having been made up of a mass of splintered, overly self-serving, sometimes arrogant, mom-and-pop service providers are perhaps not far from the truth, in some cases. It is not hard to understand how vendor service, in the minds of many subscribing to it, may have become what many would consider an oxymoron, something like “Microsoft Works” or “sanitary landfill.” Conversely, many clients have treated vendors in a crass and unappreciated way, perhaps with good reason.

Today, when financial organizations order closing services from venders, most have a purchase-order system, which ties in nicely with other financial records of their business. They, for the most part, fax these orders to service providers, which re-enter them into their systems, creating a duplication of effort with no connectivity to the source of the orders. Most vendors systems are different from that of their competitors, creating a vast system of unique and independently operating databases of records, maintained by both clients and vendors, none of which are compatible or communicable with one another.

It is time that we got together as an industry and agreed to subscribe to a single system which will be much more efficient and which holds all parties accountable to the transaction. What if there was one single standard for placing, receiving, recording and confirming orders from financial organizations to that of their venders? The vender would have to do very little data entry, if any, and the client could use the same system with each vender. This would permit online confirmation, communication, product tracking, shipping notification and receiving confirmation.

The ideal system would be one that subscribed to an international standard for the handling of orders for mortgage loan closing service. This standard would insure that each client and vendor would be “singing off the same page of the hymnal” and doing so in such a way that orders would be entered in systems only one time. That process would be streamlined by using previously entered data from, say, when the loan application was taken, thus requiring very few keystrokes to place orders for title services, credit reports appraisals, etc. There would be very little re-entering or fiddling around with data once it had been entered. Each party would have access to the part of the records which they have a need to know about to include project status, through a seamless system. It would all become a central system of connectivity between the client and the vendor, thus adding a new meaning to the term connections, which shall be referred to herein as connectivity.

There is already some help on the way. Systems such Real Trans and Appraisal Port are already offering the kind of connectivity as referenced above. It should be noted, however, that these and other systems like them are different and do not subscribe to a single protocol or format. When financial organizations subscribe to these various systems, vendors find themselves having to subscribe to a number of these services, therefore creating a more complex and less useful system than necessary. I vote for a merging of the formats of the platforms mentioned above, allowing a single client, vendor system format available to all clients and vendors. While governmental intervention would be just that, intervention, one wonders if there is not some way for the government to make a positive contribution to establishing a standard, then getting out of the way and letting private industry take the ball and run with it. This can only happen with the blessing and assistance of the various financial industry trade organizations, representing the clients as well as the vendors, and we call upon them to step up to the plate and take an active role in forming this much needed system.

If one is to believe that connections are the route to success in business, connectivity has to be an even purer and higher road for those willing to earn the fruits of success. Being part of a fully integrated and seamless order entry system, capable of increasing efficiency while delivering a higher level of service to our clients, is the wave of the real estate closing services future.

Charlie W. Elliott, Jr., MAI, SRA, is President of ELLIOTT® & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889 or at charlie@elliottco.com or through the company’s Web site at www.appraisalsanywhere.com.