August 5, 2021
Would your real estate business benefit by hiring a full-timer real estate transaction coordinator? For many agents, self-managing transactions eats up valuable time. Investing in help with transactions simply makes sense.
But deciding to outsource business activities can be tough. Often, the choice falls between hiring a full-time employee and using an independently contracted coordinator, a transaction coordination service, or even a virtual real estate transaction coordinator.
Read on to learn the pros and cons involved with hiring and contracting a real estate transaction coordinator.
First, the basics: What, exactly, is a real estate transaction coordinator? They're a real estate professional who's responsible for handling the details of a transaction. This may include completing paperwork, tracking deadlines, managing communications between stakeholders, and other administrative work.
They may also handle duties such as:
The real estate transaction coordinator also acts as the connection between parties. They can serve as a point of contact between clients, agents, vendors, escrow companies, title companies, property managers, and more.
Having a coordinator to take care of the details can free up an agent's time. Then they can get away from the paperwork (and the computer screen) and focus on other priorities, such as growing their business and building client relationships. Some agents choose to outsource this work to a contracted employee or a transaction coordination service.
But handing off this type of work can be a difficult decision. Many agents like to be hands-on; after all, if something goes wrong, a deal may fall through. That's why some agents choose to hire an in-house, full-time transaction coordinator.
Let's start with the bottom line: Overall investment cost. Hiring a full-time employee represents a significant investment of time and resources. First, there's the recruitment process and the administrative cost of setting up and holding interviews.
Once you find and hire the right candidate, factor in costs such as benefits, salary and taxes. Then there's the time training the new employee and getting them up to speed.
According to Inman, expect to invest from $35,000 to $60,000 to get an effective, new real estate transaction coordinator up and running in 12 months.
In contrast, using a transaction coordinator service costs less up front. Your initial expense starts with time spent vetting which service to use. After you decide on a vendor, most services are billed on a transactional basis.
Expect to pay about $350 per service. While initial costs may be less, over time these costs will add up. You'll have to decide whether it makes more financial sense to hire an employee or use a service long-term.
Agents use real estate transaction coordinators to free up time spent on administrative and other tasks. But all the time in the world isn't worth it if a coordinator's skill level isn't up to par.
When you hire a coordinator, you'll be able to train them in the way that you prefer. They'll learn the ins and outs of your agency while getting to know your client base.
On the other hand, a coordinator service will do the training for you. Of course, that training won't be specific to your agency and area.
Using a service will require careful research and vetting on your part. You'll likely need to handle specialized training once you find a service, as well, to make the contractor work for your agency's specific needs.
Another consideration? Redundancy. Say you've hired a transaction coordinator, but they get ill or need to go on leave. Either you must go back to doing all the admin work yourself (while still paying your employee's salary) or find someone else to take their place.
The solution may lie in using a virtual real estate transaction coordinator on a short-term basis. While your employee is on leave, a coordinator service can step in and fill the gaps.
Of course, they may not be trained in every detail and specific of your agency's workings. But a reputable coordinator service will have vetting and training programs in place that should allow a temporary transaction coordinator to come in and help out.
The decision to hire a full-time real estate transaction coordinator or outsource to a third-party service may not be an easy one.
Both options offer pros and cons. Taking a look at your bottom line — as well as the potential benefits and possible pitfalls involved — can help you make the best choice for your agency.
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