Let’s face it, real estate transactions can be extremely complicated and take up a lot of an agent’s time. But, dealing with contracts and disclosures comes with the territory when you’re in escrow.
While this is a necessary part of being a real estate agent, savvy agents leverage their time, so they can continue cultivating leads and getting new business.
One way to make time for yourself is to hire a transaction coordinator (TC.)
One important thing to know is that a Transaction Coordinator is not an assistant. Their priority is to keep the transaction in order and manage the documents.
So, what is a transaction coordinator, and what do they do?
First, let’s look at the transaction process to see how a transaction coordinator gets involved.
Understanding the Transaction Process
When you’re an agent, you represent your clients. Whether it’s the buyer or the seller, they are the principals in your real estate deal.
Opening escrow starts the transaction process. The escrow company is responsible for ensuring that every stipulation of the contract is met. They act as a neutral third party to protect the deal’s integrity.
But, they don’t exactly work for you. Transaction coordinators get their fees from the seller.
All the required contracts and disclosures involved with the transaction must be completed and signed by all parties. This usually falls on the agent, but you can hire a transaction coordinator to do this for you.
What You Can Expect From a Transaction Coordinator
A transaction coordinator’s goal is to handle contracts and disclosures. They are responsible for ensuring that all documents are completed in the proper time frame.
The offer will outline when certain documents are due and which parties get them. The transaction coordinator will calendar all dates and keep you informed.
A transaction coordinator will do the following:
- Ensures the signed purchase agreement gets satisfied
- Calendars key dates and contingencies
- Updates the agent on the file status during the deal
- Prepares and sends disclosures and local addendums to clients for signature
- Talks with escrow to ensure deliverables are received on time
- Order reports
- Forward commission instructions for a broker signature
While these are the common duties, every transaction coordinator is different. Ask upfront what services they provide. That way, everyone is on the same page.
What Not to Expect from a Transaction Coordinator
A Transaction coordinator does not have to be licensed, but you should hire one that does have one. When a transaction coordinator has a license, they become familiar with the transaction process and disclosures.
Whether a transaction coordinator has a license or not, there are a few things you shouldn’t expect them to do.
They Won’t Write Contracts
A transaction coordinator will prepare certain disclosures, but they won’t write them. But, they can explain everything you need to know about disclosures.
A Transaction Coordinator Doesn’t Negotiate
A transaction coordinator will talk with all parties to gather signatures or to deliver documents. But, don’t expect them to negotiate terms with the other agent or their client on your behalf.
Your transaction coordinator will schedule reports, such as a home warranty or NHD report. But, they won’t schedule general or termite inspections.
As the agent, you are present at these inspections. You must maintain control and coordinate them yourself.
Benefits of a Transaction Coordinator
The benefits of hiring a transaction coordinator are:
- Time savor
- Liability limits
They Will Save You Time
On average, completing a file can take anywhere from 8-15 hours. Each transaction is different, so that estimate depends on the deal and how many parties are involved.
As we discussed earlier, gathering all the required documents and disclosures is tedious and time-consuming. They will also save you time by updating all parties on the status of the file. Using a transaction coordinator can help you leverage your time and use it on more productive tasks.
As an agent, you will have time to get more leads, meet with new clients, and network. You will be able to get new listings and secure future income. These activities result in more open deals and more commission checks.
Limit the Liability Involved
As mentioned earlier, the goal of the transaction coordinator is ensure the success of every document. This will result in flawless paperwork and ensure that you have fully compliant files.
This is crucial. This will limit your liability if you are sued or a complaint is filed against you. Your files may also be subject to a random DRE audit. Having clean files will lessen the chance that you have to use your Errors and Omissions Insurance.
Errors and Omissions Insurance helps protect you from lawsuits. This is a safeguard against people who claim that you made a mistake or were negligent while performing as an agent.
Transaction Coordinators are Affordable
Yes, hiring a transaction coordinator is affordable! They are considered independent contractors. This means they get paid per deal and are not considered an employee.
Prices will differ depending on what services they provide. But the average price you can expect to pay is between $350 – $500 per file. Overall, this is a fraction of what you will receive as your commission.
Most agents will have the escrow company pay the transaction coordinator along with their commission check. This makes payments simple.
Final Thoughts on the Benefits of a Transaction Coordinator
Every agent should use a Transaction Coordinator. The benefits and advantages outweigh any cost.
As a new real estate agent, it is always a good rule to have ownership of a task before you give it away. So make sure you are informed of the process and have a good understanding of the disclosure and contracts.
That being said, make the investment to use a Transaction Coordinator. They will literally save you time and money.
Source: carealtytraining.com ~By: Karen D. Friedman ~ Image: Canva Pro