How to Choose Closing Coordination Software Jonathan Cutlerprofitability, Closing Coordination, real estate transactions,
More transactions, more stress and thinner margins--qualities
that could describe any business, but hit a bulls eye for anyone
involved in real estate. The increasing volume of transactions
required to maintain profitability is causing most industry
professionals to look for new technologies that break through the
frustrating "glass ceiling" of efficiency. Closing coordination
software is an entirely new category of software that works
alongside your current software and increases your margins by
eliminating the built-in redundancy of your business processes--it
shatters the glass ceiling of efficiency.
By adding, reporting, archiving, tracking and integrating
Internet features to the software you currently use, closing
coordination reduces the management overhead of the average agent,
title company, builder or lender by as much as 35 percent, while
simultaneously improving customer service. Most of the gains are
achieved by eliminating redundancies in faxing, phone calls, filing
and searching for files, e-mail, and travel. Ironically, the same
real estate pros who have been slow to investigate this new
technology might be surprised to find that their clients are
already wondering why they cannot obtain their transaction
information via the Internet. Think about it--your clients are the
same people who already use the Internet to check airline
schedules, research their ailments, check school closings, trade
stocks and e-mail jokes to their friends.
In a typical real estate transaction, 10 different parties and
20 different steps must occur concurrently before a transaction can
be finalized. More than 50 forms are faxed or reviewed and between
150 and 400 phone calls are made, depending upon who you ask. By
using closing coordination software, each party sends documents to
their unique Web site, posts their messages on one electronic
bulletin board and makes their lists of open items for everyone to
"click on" in order to view them. With a 24-hour location to
conduct business with your company, your customers become
more, not less, connected to the
people involved in the transaction.
While most companies have Web sites, the next step is
understanding that a Web site can be more than an electronic
brochure or information service--it can actually do work.
Therefore, when evaluating closing coordination, it is not a matter
of finding the correct Web site, but finding the correct set of
software tools that use the Web to implement their communication
components. Not every software package is created equal. So, like
any new purchase--there is homework to be completed. Questions you
should ask yourself and software providers are as follows:
++Communication and Document Delivery
Can the service provide secure document delivery, document
sharing, scheduling, task tracking, messaging and group e-mail?
++Ordering
Will the service provider allow you to order an appraisal,
inspection, survey or anything else you may need with a few clicks
of the mouse? Must you work with in-house or network services, or
can you work with your usual vendors?
++Logging
Is the service provider capable of tracking everything that
occurs on your Web site? If something does not look correct or you
end up with a "different impression of events" than your client or
vendor, your Web site event log should tell the true story of who
said what and when they said it.
++Archiving
If your Web site logs every message, document, form, task and
calendar item from every closing, can you keep that record for
perpetuity or obtain it on CD? Logging without archiving is like a
car without gas. Archiving will ultimately greatly reduce the
mountains of paperwork you have to file and save.
++Reporting
Can you view all of your current closings on a single screen or
in one simple report? Does this report provide you with the
information you need and care about? If you have a
significant volume of business, you need to access your
transactions with a click of the mouse and without logging in and
out each time. Is recent activity flagged for you? Look for a
system that can export reports to a spreadsheet, or e-mail this
report to individuals you work with in order to produce maximum
efficiency. Can you receive multi-level reporting for corporate
oversight?
++Neutrality
This is probably the least discussed and least obvious, but is
the most important feature for any software that will survive more
than a year. Several closing coordination platforms are designed
specifically for real estate agents, lenders or relocation use.
Yet, the word "coordination" means that any tool you use must be
meaningful and powerful for other professionals you work with as
well.
Why? It seems obvious, but if the title company, appraiser,
lender, builder, inspector or agent does not find it to be a
time-saving and economic application for their business, they will
not use it and you will not reap the benefits. You want the
software you use to also be the software they use.
++Integration
Can your closing coordination software import data from your
production software or export it in a format useful for your
vendors? Integration means that the software you select can import
and export common file formats that are useful for all parties to
the transaction. Without integration, everyone is forced to reenter
the same data--data which may already exist in their other
software.
++Security
Is the Web-based software you are considering hosted in a true
national data center or in someone's office? Even worse is, are you
expected to host your own Web server? Hosting an application server
with Internet access is a unique and special business, and one that
should be outsourced to the pros. This is your assurance of
24-hours, seven days a week availability, fire protection, power
redundancy (especially in California!) and nightly data backups.
With good hosting, security on most Web-based applications
significantly exceeds the security of maintaing the same
information in your office.
++Cost
Any good closing coordination software will save you more than
it costs, but how much does it cost? Five ways that companies
charge for services are as follows:
1. A per transaction fee, where you only pay for what you use,
make no time commitments and can often pass the cost on the
buyer/borrower.
2. Advertising supported services that are free to the user, but
not sustainable long-term.
3. Referral fee supported, which is free only if you are willing
to ask your vendors to register and pay a fee.
4. Per seat or license charges tied to a period of time, which
usually requires set-up fees and time commitment, and are hard to
pass on to the buyer/borrower or share between offices.
5. Vendor supported, which is free only if you use this vendor
for every transaction and they build it into the price of the
service.
If you are a volume player with access to the Internet from your
office and have reasonably updated computers (less than four years
old), then you can immediately benefit from closing coordination
software in a significant way. If you are a smaller office sharing
a single connection to the Internet, the advent of closing
coordination is probably a sufficient reason for you to consider
adding additional locations in your office for Internet access and
upgrading your connection. If you are still using a free or
consumer e-mail account which filters or limits attachments, you
probably do not realize it, but you are advertising yourself as
small and dated to all of your vendors, clients and associates.
It is no longer true that businesses are ahead of consumers in
new technology. Your clients are already researching communities,
finding builders, real estate agents and other services, and
researching loan pricing online. They, or at least the
approximately 75 percent of the population who are online, assume
you will provide them with access to their closing and escrow
documents and information via the Internet. Do not let your
competitors beat you in this game--it is too easy to be a
winner.
Jonathan Cutler is president of SettlementRoom Inc. He may
be reached at (877) 914-1900, e-mail
[email protected] or
visit www.settlementroom.com.
