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Orchard Q&A Series: How does the Orchard whole loan sale process work?

Next week I will be attending SFIG 2018 in Las Vegas and will be available for meetings. Feel free to contact me chris.elizondo@orchardplatform.com to schedule some time.

 

Why partner with Orchard for a whole loan sale instead of a traditional broker? The differences are subtle but important to understand. Much like traditional brokers, we help sellers navigate asset sales to achieve optimal outcomes. But our process also uplevels the traditional sales process with our technology, data science, and market expertise.

We’re often asked how long the sales process takes. Although the entire duration of a deal depends on many variables, the average cycle from launch and bid acceptance to closing takes 2-3 weeks.

 

Step 1: Deal Preparation and Analysis

Our process begins where the traditional sales process does: with deal preparation and analysis. We begin by matching a dedicated Business Development Manager from Orchard’s Sales and Client Service team to the seller. That ‘Orchard Lead’ (or Lead) works to understand the seller’s goals and expectations. Whether a seller wants anonymity, a middleman, or just a facilitator, the Lead listens and tailors the process to that seller’s requirements.

Price discovery starts with sellers sharing their loan tape with Orchard. We import the seller’s loan tape into our system, exposing that data to our analytics tools and our data scientists for detailed analysis. Sellers are also given open access to Orchard tools to conduct their own analysis. However, in practice, many use our pricing analysis and tools to supplement pricing they’ve received from a third-party valuation agent in an effort to broaden their understanding and better align their price expectations with the market.

Once a price guidance range is determined, we design a custom sales strategy, review our database for top prospects, establish a sale timetable, and move on to Step 2.

 

Step 2: Deal Marketing

Building buyer interest around the sale comes next. The Orchard Lead employs a multi-channel outreach strategy, including a pre-marketing campaign to introduce the sale to our buyer network. Our tactics at this stage resemble the traditional sales process with some notable improvements. Like traditional brokers, the Lead may email or direct-call top prospective buyers. We also encourage sellers to post their offering on our private online Deals platform as well. Our goal is to empower sellers to own their profile and listing, but we understand they may need hands-on help — and we offer white-glove service where desired.

 

Step 3: Due-Diligence and Monitoring

Our virtual, secure Data Rooms streamline the due-diligence process for sellers. Instead of transmitting documents manually to potential counterparties—in a steady of stream of emails, spreadsheets and phone calls like most traditional brokers—Orchard sellers can manage their individual data room for each transaction, upload the required documentation, permission interested buyers to view the data room’s contents, as well as monitor activity.

 

That last bit may be the best part? Not only is the data room secure and dead-simple to use but the ability to monitor buyer activity provides additional insight to the seller such as whether or not a document has been viewed by a buyer, which buyers have accessed the documents, and logs the times a document is viewed.

 

Step 4: Bidding and Execution

In the final phase, the Orchard Lead typically shoulders the load for sellers. We manage the bidding process and associated deadlines for efficient execution. The Orchard Lead aggregates questions, collects and communicates bids, and supports negotiations with relevant benchmark data and analysis. In short, the Orchard Lead carries the execution phase forward.

Our tech-enabled sales process improves efficiency, transparency and flexibility; improves pricing accuracy, informed by market expertise; and facilitates transaction speed, quality and outcomes.