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National Mortgage Professional
Jun 23, 2005

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.
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