A long time ago, back when I had far fewer rings around my tree, I penned a little ditty about Transaction Coordinator (TC) fees. It drew some (mostly) friendly fire, and I still get calls on this post today.
Read it here, or you can simply rely on my CliffsNotes in the comments section. “Use a TC or don’t, but don’t delegate your responsibilities, and don’t charge the client,” I said. That’s my story, and I’m sticking to it.
I’m reopening this can of worms this morning not because I find this a most fascinating, mind-bending topic on par with “Remind me again, why are the Kardashians famous?” Rather, it is the subtext in a couple of the reader comments that I find troubling– comments I was reacquainted with recently when I had to pay a visit to this earlier post with my fire hose to extinguish the latest flame.
With that introduction, let’s play a game called “Find the Flaw in the Ointment.”
Exhibit A: “Thought I would just mention that I have been a broker since 1990 and there are plenty of real estate agents that do not have any training or mentoring. Having a good TC on their side is a great way to keep your broker files in compliance.”
This one is easy. Yes, there are “plenty” of agents that do not have any training or mentoring. You will get zero argument here. But maybe the answer isn’t to simply toss them out in the streets armed with lockbox access but little knowledge of the contracts and the actual transaction process. I am going to go out on a limb here and suggest maybe the answer is to provide them with training and mentoring so they don’t need an intermediary to save them and their broker from a trip to mediation.
If you use a TC, you still have to manage both the activities of the TC in your employ and the process, and you can’t do that without a clue. Our job is to indeed have a clue — about all facets of the process, not just the tasks we find most intuitive or fun.
Take Steve. We have been living in the same home for eleven years. During those eleven years, we have never deviated from the original blueprint for where the “stuff” goes. Yet, each time my most helpful domestic partner unloads the dishwasher, I know it because all of my Tupperware is suddenly piled haphazardly atop the counter, giving new meaning to “Tupperware party.”
“I don’t know where it goes,” he says. And he doesn’t, because I have never properly trained and mentored him. Rather, I do it for him. Granted, the only danger in this example is that he might not be able to find a two-quart food preservation container when he really, really needs one. But, I’m pretty sure his escrow won’t be delayed or no one will be landing in court as a result. Not so much with that annoying real estate paperwork.
Exhibit B: “Agents (Top Producers) who spend more time and money marketing and being more productive are attracting more business into their front doors, these agents are the ones who do not have time to make phone calls and shuffle paper.”
Uh, OK fine. But that’s just the problem, isn’t it? Forgetting for a moment that I have plenty of time to make phone calls and shuffle paper, manage a brokerage, and maintain enough of my own business to pay the cable guy, it is a harsh reality that we need to attract new business to have a business. And, yes, the more business we attract, the more money we will make. It’s simple math. But where’s the part about doing the business?
Much like large brokerages define success by the number of agents they can attract, seemingly forgetting that quality and quantity are not synonymous, too many agents tend to focus on the part about recruiting clients, forgetting that once you’ve got one of those guys, you have a duty to them to perform the work.
And here is some more, simple math. It’s crazy, I know, but when you actually do your job and do it well, the business will follow. Being the world’s best client recruiter will only get you so far if you don’t know where the Tupperware goes once the contract is inked.
Exhibit C: “If you feel the need to chase all of that paperwork yourself and ensure that you are covered by all the ridiculous disclosures and that all are signed, dotted, T’s crossed then so be it. But you all should really be using your time more wisely by chasing down more clients, and servicing them more personally then by chasing paperwork.”
“Ridiculous” disclosures, indeed! And I assume here we are talking about the ridiculous disclosures required by law. You know — the ones dealing with past and pending litigation, death on the property, property condition including major systems, structural components, and active infestation of wood destroying pests, CC&Rs, clouds on title, and the like. Who expects their agent to concern himself with that kind of drivel?
So, yes, I suppose we should really be “chasing down more clients.” “Look, Steve!” That one’s getting away!” I might say. After all, it’s hard to win the hog-tying competition in this rodeo when you are busy issuing a Notice to Perform, making sure the buyer’s funds for closing have been verified, or confirming that the parties’ contractual obligations have been fulfilled within timeframes.
Big Finish: So that I am perfectly clear, let me say it again. Use a TC or don’t, but don’t delegate your responsibilities, and don’t charge the client. I am not saying that there aren’t awesome, professional TCs out there; there are many. I am not saying that you can’t do your job while delegating the paper chasing; you can. I am just saying that you shouldn’t delegate your duties to your client in the process.
Using the services of a TC does not relieve an agent from his obligation to know where every piece of paper is at every stage of the process (because we have a little thing called “time frames” in the contract), nor does it relieve an agent of his responsibilities to read, understand and explain every document to his clients (because we have a little thing called “fiduciary responsibility). For me, particularly given the nearly paperless environment in which we operate, having done these things, it requires only marginal additional effort to fetch a signature or to save a document to the digital file.
Speaking of disclosures, here’s one. Steve uses a Transaction Coordinator. He uses me. But, in Steve’s case, he is still in control of the process. If he is missing a contract or a signature, he simply need swivel his chair 180 degrees and bop me upside the head with his stapler. It is a very efficient arrangement. And I still put the Tupperware away.