Agent tools - transaction management and back office

Real estate involves a lot of paperwork at the agent and brokerage level. Agents must deal with contracts, closing documents, and disclosures. Brokerages need to ensure that agents are complying with laws. They also have to hold onto documents, and pay their agents. transaction coordinators support this work.They assist agents from contract to closing. They work with clients, agents, title officers, banks, and lenders to ensure a home sale closes. Software has emerged to solve problems across these functions. For agents, these tools address:

  • How do I manage my contract-to-close checklist better?
  • How can I ensure that my files and processes are compliant with relevant laws?
  • How can I send and sign documents electronically?

Brokerage solutions answer similar questions at company-level. They include:

  • How do I manage agent onboarding and ongoing compliance?
  • How do I pay agents based on their commission plans?
  • How do I store and track documents for audit and tax purposes later?

Transaction management software

Transaction management overview

Once an offer has been made by the buyer and is accepted by the seller, a home is now considered under contract. But there are many things that have to happen before the home closes. This stage is typically categorized as transaction management. Agent teams and brokerages often hire transaction coordinators (TCs) to help with this stage. TCs help collect signatures, coordinate title/escrow, mortgage, and support appraisal processes. They sometimes even coordinate inspections and repairs. They provide necessary documentation to the brokerage for compliance. And they schedule and attend the final closing process. As you can imagine, this involves a lot of paperwork and a lot of people. If there isn't a TC helping with this process, typically the agent handles this work.

Many real estate brokerages hire dedicated contract managers and transaction coordinators. These professionals help support contract-to-close work. Source: ZipRecruiter.

Transaction management software

Transaction management software features are pretty consistent across different products. Many features that agents and brokerages need are for regulatory compliance and paperwork. As a result, core feature needs are well-defined.

  • Transaction pipelines with folders and notifications: agents can set up folders or processes by each deal. They can then create checklists or stages to move each deal through. Agents and transaction coordinators can update the status on each step. Some platforms create reminders to ensure tasks are completed on time.
  • Forms, signatures, and document storage: the closing process is very paperwork intensive. Most software will store essential forms, send them for completion to the appropriate recipient, and facilitate in-person or e-signatures. 
  • Audit logging and compliance tracking: transaction management software exists largely for compliance and audits. Most platforms log every action and step taken in the software. This ensures each process is compliant with relevant laws. Later, the agent can instantly reference a transaction if an audit or question comes up.

Most platforms also include some additional features. Below are a few examples of advanced transaction management software features.

  • Template documents: some document-focused transaction management programs include template documents. These are often based on local association or regulatory body documents. These help agents to start with custom paperwork instead of having to upload or create forms to start.
  • Reporting and analytics: these features show what closings are coming up and if there are any status changes. They help agents ensure that transactions are closing on time. Agents can then follow up with any tasks that are  running behind schedule.
  • Integrations: transaction management software often has a lot of integrations. This is because data might need to be received or sent to lots of different places. For example, an agent might store completed document packets in Google drive. And the agent will want to update lead status in their CRM on closing. Finally, they may need to create an invoice in Quickbooks to send to a brokerage.
Paperless Pipeline offers a feature set similar to other top transaction management software. Source: Paperless Pipeline.

Popular transaction management software

Transaction management software functionality typically varies by price. Different agent teams and brokerages opt for whatever is most relevant for them. A solo agent handling three or four deals a year only needs basic support. A massive brokerage needs to track and audit thousands of documents extensively. There are four broad categories of transaction management software.

  • Forms and signatures: basic form and signature support can solve most needs of manya gents small agent teams. These products focus on storing custom forms and requesting e-signatures from all parties. DocuSign and zipLogix are two of the most popular providers. Many brokerages and REALTOR associations include subscriptions to form and signature software solutions.
  • Disclosures: software focusing on disclosures adds audit and compliance support to basic forms and signatures. This is critical in markets like California. In these markets there are countless legal requirements on required disclosures. If a single disclosure is omitted, there is significant legal risk to the agent. Disclosures software can be very basic and focused on forms only. But others also have beautiful landing pages to accept offers and move clients through the closing. A good example of a robust disclosures product is Disclosures.io. It has become one of the top offerings in Silicon Valley, a market where disclosure requirements are very high.
  • Agent transaction management platforms: these products are built for agents and teams. But they are sometimes provided by the brokerage. They help agents work on a large number of deals on their own or with transaction coordinators. They include collaboration tools as well as form, signature, and disclosure support. Dotloop and Skyslope are among the most popular.
  • Brokerage back office and accounting platforms: Some software packages for broader brokerage operations  include support for transaction management. This tends to make sense because brokerages need transaction data to handle payments and accounting. Platforms like Brokermint and Lone Wolf Technologies offer back office brokerage software that includes transaction management for agents.
Transaction management software can get complex. Some agents simply use eSignature software like DocuSign to manage their processes. Source: DocuSign.

Virtual transaction coordinators

Instead of hiring in-house transaction coordinators, agents can hire remote transaction coordinators. These are often called virtual transaction coordinators. Companies like Transactly offer this type of service. They use their own in-house software to also make this work more efficient. These services are often flexible and  work with any system an agent is comfortable with. Skyslope, a transaction management software company, even offers virtual transaction coordinator service with its SkyTC program.

Companies like Transactly offer remote contract-based transaction coordinator services. Source: Transactly.

Brokerage back office and accounting platforms

Brokerages have to manage transactions and agents. There are a large number of forms, accounting practices, hiring standards, and compliance requirements to follow.  And the brokerage still has to run a business. This includes paying taxes and tracking expenses and profitability. Brokerage back office and accounting software helps with all of this.

Brokerage back office and and accounting software features

Like transaction management software, back office and accounting platforms tend not to vary too much. The large amount of compliance and regulatory requirements means feature needs do not vary much. Two examples of back office and accounting software are Brokermint and Broker Sumo. An accounting-only platform that many brokerages use is AccountTECH.

  • Transaction management and file storage: most back office platforms include transaction management. If they don’t, then they need to allow agents to easily upload or share closing documents. A large value of back office software is storing and tracking this type of data for reporting and audits. Transaction management features can include everything mentioned in transaction management software above.
  • Commission tracking, billing, and payments: one of the core advantages of back office software is automating commission payments. Agents at a brokerage often have different splits. The process of paying them can be confusing without automation. Many of these programs also manage commission disbursement authorization or CDA documents. These forms are filled out by agents. They let the brokerage know an agent followed essential processes necessary to receive their commission. They also include calculations for fees. Platforms can also include billings for any fees charged to agents.
  • Reporting: most back office platforms allow brokerages to generate custom reports. These help comply with any audits and track the progress of the business.
  • Agent onboarding and management: many back office solutions help onboard and manage agent employment. This improves the experience for agents by reducing paperwork. It also makes life easier for brokerages by automating data collection. This also allows commission splits to be applied automatically to any deals. It also means that brokerages can generate tax documents like 1099s quickly. Some platforms also include the ability to analyze agent productivity from this data.
  • Accounting: many back office systems include full accounting systems. or integrations with popular tools like QuickBooks. This helps align commission payments and agent contracts with standard accounting practices that a brokerage needs to follow for taxes and reporting.
Products like Brokersumo help brokerages onboard and pay agents at scale. Source: Brokersumo.

Back office and accounting software adoption varies

The range of back office and transaction sophistication can vary significantly. After all, this entire process was previously handled without technology. Technology can help with the process but isn’t mandatory. For many small brokerages, there isn’t a huge need to add new back office processes. Back office software can be expensive and hard to learn. The win isn’t  immediate for the company.

That said, for larger brokerages, back office software can be essential. Large brokerages often employ in-house transaction coordinator teams and accounting staff. Using software can make the staff much more effective. Reducing the time these teams spend handling paperwork will allow the brokerage to support more agents with the same staff. Some brokerages even charge transaction fees to support the operational cost of each transaction. If brokerages can use software to make their cost of each transaction lower, they can actually generate a profit from these services.

Some brokerages charge fees on each transaction to cover the cost of in-house staff. Back office software can help brokerages generate a profit on each of these fees. Source: Real.
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