Michael Russer, a.k.a. Mr. Internet®, is CEO of Russer Communications. He is a leading speaker and author in the real estate industry and has been writing about Internet marketing and virtual outsourcing since the dawn of the commercial Internet.
Automated Transactions: Managing the Deal Online
A virtual transaction management specialist can help move your deals smoothly to close.
July 1, 2005
Nearly 30 years ago when I started my real estate sales career, the purchase contract was almost (but not quite) one page long; there were few, if any, seller disclosures; financing was your choice of fixed, fixed, or fixed rate; and radon was something you sprayed on ants in the kitchen before final inspection. Things have changed just a bit since then.
Today, putting a property or buyer under contract is often looked upon as a detail-ridden, arduous (and sometimes perilous) journey rather than a cause for celebration. That is because the complexity of today's typical real estate transaction is many times more than it used to be. And, this is a trend that is only going to get worse.
This means three things for the real estate practitioners who insist on doing everything themselves:
- You put an absolute limit on how many transactions you can have under contract before they and/or you start falling apart.
- Because managing transactions is not your primary job, things will fall through the cracks—it’s not a matter of if but rather when it will happen.
- Client satisfaction and how they perceive the value of your services are diminished, thus reducing your chance of repeat or referral business.
Without question, the most expensive, time-consuming, and frustrating way to manage your transactions is to do it yourself. Fortunately, there is another way that frees you up to take in as many transactions as you want, while a pro handles the details and keeps all pertinent parties informed 24/7.
Online Transaction Management to the Rescue
Online transaction management (OTM) is the process of managing transactions using Web-based systems operated by specialists (typically virtual assistants) to manage nearly every aspect of your transaction from their home office. There are a number of tools that OTM specialists use to keep the transaction process moving smoothly. Two of the more popular ones are SettlementRoom and g3Direct from Guru NETworks.
When OTM tools first started coming on to the scene in the late 1990s, they were primarily marketed to individual salespeople and brokerages. After realizing that individual practitioners are not keen on learning yet another point-and-click tool, these companies started focusing on selling to virtual assistants who wanted to specialize in OTM. This was a smart move because now salespeople don't have to learn a new tool, yet they can enjoy all the benefits of all that OTM offers through specialists using one or more of these tools.
How OTM Works
At this point, you may be wondering how an OTM specialist from Oshkosh, Neb., can handle or even understand your transaction process in Florida. Clearly, there are major differences in the closing process for different parts of the country. Even salespeople within the same office will have their own preferences as to how the transaction process is handled.
However, a process is just a series of well-defined steps and contingencies. The beauty of OTM tools is that they can typically be configured to handle nearly any kind of transaction process. If you were to hire an OTM specialist to manage your transactions, here are the steps you would likely encounter:
- The OTM specialist will interview you to determine the process you use to manage your typical transaction. This includes documents, deadlines, services to be performed, etc.
- The OTM specialist also will ask you for exceptions to the standard process that might occur.
- The OTM specialist then creates a transaction management template that reflects your way of managing and closing transactions using the Web-based system of choice.
- After the OTM specialist has set up the system to handle your transactions just the way you need them, the specialist is now ready to start managing your new transactions. (NOTE: the following is just a partial list of what an OTM specialist might do when processing your transactions.)
- You fax all the transaction documents to the OTM specialist; the specialist then loads them into the Web-based system.
- The OTM specialist contacts you by phone to determine any other details that may be special for this particular transaction and modify the customized template accordingly.
- The OTM specialist assigns passwords to each party to the transaction so each can track the status 24/7 from a Web browser. (NOTE: Parties typically will be able to view only those parts of the transaction to which they have been authorized, which enhances transaction security.)
- The OTM specialist executes the tasks and maintains the deadlines as determined by the customized process. This includes making contact with other parties to the transaction and settlement service providers (and documenting the conversations) as per your prior authorization.
- The OTM specialist contacts you if it appears there is a problem or third-party delays in executing any of the process steps.
- If you request it, the OTM specialist will keep you and/or your client informed as to the progress of the transaction.
By having an OTM specialist handle your transaction management, you are free to take in more business, you look more professional in the eyes of your clients, and you are in more control of the entire process. Control is not about doing it yourself; it's about having it done consistently and professionally. In this case, “letting go” of the transaction management process is the way to stay in control.
Compared to the value of your time, OTM is very affordable. Typically, an OTM specialist will charge a one-time initial setup fee to customize their system to the way you do business. After that, they charge by the transaction. Prices usually range from $200 to $350 per transaction. It is important to note that cost of using the Web-based OTM tools is built into this pricing. If for some reason, the transaction doesn't close, many OTM specialists will only charge a minor cancellation fee rather than charge the entire fee.
How to Find an OTM Specialist
Both SettlementRoom and Guru NETworks have lists of virtual assistants who have been trained on their systems. However, being trained and being a highly experienced pro can be completely different things. When interviewing OTM specialists, find out how long they have been doing OTM, how many total transactions they have closed, and what they charge for their services. Also ask for a list of three to five former and current clients so you can check their work.
Because an OTM specialist will free up your time, allow you to do more business, and stay in greater control of the business you already have going, you have a business that is serving you rather than the other way around.
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