January 2004

Changes in the Real Estate Industry

by Penny Sullivan

There are exciting changes taking place in the real estate industry that can be a benefit to Virtual Assistants who already know or are willing to learn transaction coordination. Some of these trends have been building since the advent of the Internet, and are changing the way business is being conducted in many parts of the country.

1. Long known as a “mom and pop” industry, there is a great deal of consolidation taking place. Brokers are merging with their local competition to form larger companies, some are joining a large franchise and others are trying to enlarge their territory through acquisition of other, smaller brokers.
2. Many brokers have decided that, as the transaction process has gotten more paperwork driven and more complex, it requires an individual with a “split personality” to be successful. A salesman loves to sell and spend time with people, and usually does not focus well on details. An analytical person likes to take control of a situation and ensure that all the “i’s are dotted and t’s are crossed.” It is hard to find someone who truly embodies both.
3. Many individual REALTORS® have purchased very elementary software products that were low priced and easy to learn, but have rapidly outgrown them. They chose these specialized programs for their computer, so that they could spend more time with their customers. Unfortunately, it has turned out that many details are falling through the cracks as the transactions near closing date. For example, just an inverted digit in a Social Security number can act like sand in the gears of progress. Typically these products have handled only parts of the process, so they don’t offer the depth or functionality needed to handle the increasing complexity of the transaction process.
4. Use of assistants by top producing agents is becoming too costly to be valuable. By becoming an employer, they now have to worry about being a trainer, supervisor, mentor, HR administrator, payroll reporter, and responsible to the Government for how they treat this employee. Most agents are forced to form a team to split these costs and responsibilities. This still hasn’t solved the problem—how to have more time to spend with prospective customers.

An interesting three-part article appeared in Inman News (see www.gurunet.net) that pointed out the increasing trend of Brokers and REALTORS® to hire someone internal to focus on the actual transaction processing. Whether the transaction coordinators the brokers hire are in-house or virtual, brokers are finding they can use free agents to sell more homes and provide a greater chance that the transaction will be timely and the documents accurate at closing. Professional transaction coordinators and real estate Virtual Assistants look for much more functionality in a product than the average REALTOR® would utilize.

Security and Data Ownership

One issue that has arisen is “who owns the data?” REALTORS®, as independent contractors, are very sensitive to this issue. It is important that a web-based service be totally secure, yet allow the owner of the data the ability to have multiple users access the data and possibly process the transactions on their behalf. The data that is collected during the process is valuable and can later be used for farming and other uses. The early adopters of transaction management are deriving benefit from having access to historical data, for transactions closed more than a year ago. Having permissions over the REALTOR’s® data can allow the transaction coordinator (or VA) complete control of the transaction while giving complete visibility, for historical production reports, to the Broker/Owner.

Why Use Real Estate Virtual Assistants?

The typical real estate assistant (hired by the agent, a team or a broker) is not a licensed REALTOR®, and, in many cases, just a data entry clerk. Thus, it tends to be a high turnover position. Brokers who have already implemented a sophisticated transaction management platform and spent the time and energy to train an assistant to do the tasks, find when that person leaves they suddenly are back to zero and have to hire and train a new person, one who usually knows little or nothing about the business model of that Broker, or the industry in general. This is when a VA can step in—a professional who has been there and done that! They already have access to a comprehensive transaction platform. In this virtual world, where documents can be accessed on a common website and faxed or E-mailed back and forth, the location of the real estate Virtual Assistant is irrelevant. Since there is little or no ramp up time and the VA has already proven they know what they are doing, the choice becomes a no-brainer.

Choosing a Transaction Management Platform

For a service to be valuable, the platform must be robust, comprehensive, reliable (24/7), scalable and secure. It must not be possible for people to see any part of any transaction to which they are not a party AND have not been granted visibility by the owner of the transaction (the Coordinator). Scalability may not be an issue for the VA personally, but one requirement for many Brokers would be that they have access to their own data, to use and reuse it for other purposes, such as marketing or leads management. A VA who is aware of the add-on capabilities of a transaction management platform can make a recommendation to the prospective customer based on their individual needs. These additional functions may include personnel, disbursement, management reporting, MLS interface and dynamic websites. The VA who can recommend a complete solution differentiates themselves from their competition as someone who has a long-range view of the needs of a Broker.

Conclusion

We at GURUnet believe there is a great synergy between the Virtual Assistants who have joined our Transaction Management Network and g3Direct, the technology. We welcome all who have mastered the intricacies of the transaction management process and want to be our professional partner in serving the Real Estate Industry.

About the Author

Penny Sullivan is the Vice President of Business Development for GURU NETworks, Inc. She has been working with the real estate industry for over ten years. She can be reached by calling 1-800-GURUnet and pressing 3 or on the web at www.gurunet.net.