Shopping for a mortgage loan on the Internet has become a common practice for many home shoppers in our world of immediate gratification and instantaneous cyber results. It gives the consumer some idea of what is available to them and allows them to somewhat anonymously test their qualifying mettle by stating generalities about their financial histories. With presto-change-o speed, they can have a cyber loan pre-qualification in a matter or minutes or hours after inputting a modicum of information.

But something is missing from this picture that has many a buyer signing off before accepting the terms, so to speak, namely; a voice, a face, and a handshake. Recent National Association of Realtors statistics show that it is estimated that although 25% of consumers visit the Web to shop for a home, about 18% of them use online findings only as an information source. Americans, no matter how sophisticated, still seem to value the personal touch, especially when big numbers are at stake. Predictions of the demise of the small, local mortgage companies have been greatly exaggerated since the emergence of online lending. Now finding a unique way to serve the consumer with a local, personal touch, yet garner the power of the Internet is a type of online lending site with a twist, called ApprovedBuyer.com.

The brainchild of two young entrepreneurs with degrees in finance from fine southern schools, Martin Wareing and James L. Moncrief, the Approved Buyer Network was a start-up in 1997, after both had spent several years in mortgage lending in Orlando, Florida area. The concept of combining Internet technology, local lenders and referred Realtors evolved from their experience in trying to find a more efficient and less costly way to assist homebuyers. They liken their operating philosophy to that of an HMO, believing that if they based their services on operating in a cost-controlled environment, they could ultimately serve the consumer better.

Their service and concept is fairly simple. Buyers go to the ApprovedBuyer.com Web site and register, making them members of the Approved Buyers Club. They cue in a desired loan amount and just a bit more information, as well as the vicinity where they would like to buy. They are then matched up with a local lender in that area. They may meet their loan consultant in person, do business by phone, fax, overnight service or Internet, but are not at that point dealing with the disembodied lender in cyber-space. A needs-list of documents will be generated by the lender that the borrower must furnish for a full loan pre-approval. The site will generate estimated closing costs based on that lender's local costs and fees.

Once a pre-approval is achieved, the buyer is then referred to a local Realtor in that area, and contact is made by phone, or, if geographically possible, in person. The Realtor then begins shopping for their client's home. The local Realtor and buyer are armed with the power of a full approval and not a mere pre-qualification, which oftentimes makes home sellers and their representing agents uneasy when taking a home off the market once an offer is accepted. If the buyer registers with the Approved Buyers Network and allows them to refer them to a Realtor to purchase their home, they will receive a credit of up to ½% of the mortgage amount (referred to in the site as the Gold Plan). If the buyer allows the Approved Buyers Network to refer them to a Realtor to sell their current home as well as purchase their new property, they can receive up to 1% of the loan amount in credit (called the Platinum Plan). There is no cost to the buyer who registers on the site, but Realtors and lenders pay a nominal fee to become participating members of the network.

"So many buyers get side-tracked when they decide to buy a home by thinking they should call a Realtor first, get briefly pre-qualified, and then find a house and make an offer," says founder James Moncrief. "Getting a pre-approval through ApprovedBuyer with the local lender they will use to purchase the home creates tremendous credibility with the home seller when it comes time to make the offer. And they have the peace of mind of working with a local, knowledgeable lender and Realtor no matter how far away they are from the area in which they wish to purchase a home."

All referral fees, costs and buyer credits are disclosed in the final paperwork at closing time, so that the consumer sees exactly what took place in the transaction. Unlike a cyber-lender, Approved Buyer Network lenders can continue to have a relationship with their borrowers, as can the local Realtor referred.

Using the Internet as a conduit and resource, but putting a personal touch into the process of getting a loan and purchasing a home, ApprovedBuyer.com seems to blend the high-tech aspect into the equation without sacrificing the emotional, hand-holding attention many consumers need during the process.

Published: August 9, 2000

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A veteran of the real estate and homebuilding industries since 1986, Dena Kouremetis first joined Realty Times as a new homes writer in 1998. Since then, she has authored four books, written consumer columns on new homes issues for websites and newspapers all across the country, contributed to builder trade magazines, appeared as a guest expert on several radio shows and even created a ten-chapter podcast for LendingTree.com’s homebuilder website, iNest.com, now available on iTunes, entitled Uncharted Waters; Navigating the Purchase of a New Production Home. Kouremetis recently joined her local Folsom, CA Coldwell Banker office as a broker associate while continuing to write for the real estate industry. For the past three years, she has been training real estate agents for both the resale and new homes industries, putting her experience, research expertise and gift of expression to work to help others entering the business.