Everyone loves saving money, and that includes your borrowers. This is why doing everything you can to help your borrowers save money is invaluable customer service. As we talked about in our last couple of blogs, one way to help them save money and provide great customer service is by working with a knowledgeable real estate tax vendor.
However, not all tax vendors are created equal. This is why it is absolutely imperative that you take the time to make sure you are working with the right real estate tax vendor for your needs.
How to choose the right real estate tax vendor
One of the biggest mistakes banks and credit unions make is simply going out and making the decision to work with the first real estate tax vendor they see. This decision could be costly. Real estate tax vendors come in all different shapes and forms, meaning some are better than others. In order to truly provide your borrowers with excellent customer service and save them money, look for the following in a vendor:
- Look for a vendor that emphasizes customization and will take a collaborative approach to your working relationship
- Look for a vendor that offers on-demand reporting and will provide you with access to electronic reports whenever you need them
- Look for a vendor that focuses on accuracy and will ask you for additional information in order to increase accuracy
- Look for a vendor that understands the importance of customer service and strives to stay in communication with you and your borrowers (this is especially important during tax season)
- Look for a vendor that believes in being efficient and delivers results and important information fast
You may not have realized it, but all of these vendor characteristics can directly impact the customer service experience at your institution, as well as whether or not a borrower is saving money (as opposed to paying extra fees or penalties, for instance). Money is a touchy subject for numerous reasons, and if you as a lender are able to provide your borrowers with a high level of customer service while saving them money, you will be in good shape.
Related Reading: Best Practices for Vendor Management in Banks and Credit Unions.
But won’t working with a vendor cost my customers more money?
Many lenders worry that working with an outside real estate tax vendor will do more harm than good to their borrowers’ wallets. However, that actually isn’t the case. In the example of real estate tax monitoring, borrowers pay a very small tax servicing fee (usually about 2% of closing costs)—and get a great deal in return for that investment.
Unlike almost all other closing costs and fees, the tax servicing fee is a “life-of-loan” service, which means the borrower will reap the benefits of the service for the entire life of their loan. This will include tax monitoring and delinquency tracking, to help the borrower ensure taxes are paid on time and avoid penalties and late fees (or even worse delinquency consequences).
To learn more about how you can help your borrowers save money by working with the right real estate tax vendor, download our latest ebook, How Working with a Quality Tax Servicer Improves Your Customer Services and Saves Borrower Money.