by: Michael Russer (a.k.a. Mr. Internet^®)
REALTOR® Magazine - July, 2005

Nearly 30 years ago when I started my real estate sales career the purchase contract was almost (but not quite) one page long, there were few if any seller disclosures, financing was your choice of fixed, fixed, or fixed rate and radon was something you sprayed on ants in the kitchen before final inspection. Things have changed just a bit since then.

Today, putting a property or buyer under contract is often looked upon as a long, detail-ridden, arduous (and sometimes perilous) journey rather than a cause for celebration. That is because the complexity of today's typical real estate transaction is many times more than it used to be. And, this is a trend that is only going to get worse.

This means three things for the real estate practitioner who insists on doing everything themselves:

• You put an absolute limit on how many transactions you can have under contract before they and/or you start falling apart.

• Because managing transactions is not your primary job, things will fall through the cracks -- not a matter of if, rather when it will happen.

• Client satisfaction and how they perceive the value of your services are diminished thus reducing your chance of repeat or referral business.

Without question the most expensive, time-consuming and frustrating way to manage your transactions is to do it yourself. Fortunately there is another way that frees you up to take in as many transactions as you want, while a "pro" handles the details and keeps all pertinent involved parties informed 24/7.

Online Transaction Management To The Rescue

Online Transaction Management (OTM) is the process of managing transactions using Web-based systems operated by OTM specialists (typically virtual assistants) to manage nearly every aspect of your transaction from their home office. There are a number of tools that OTM specialists use to facilitate the management process. Two of the more popular ones are Settlement Room and g3Direct from Guru Networks.

When OTM tools first started coming on to the scene in the late 1990's, they were primarily marketed to individual sales people and brokerages. After realizing that individual agents are not keen on learning one more "point and click" anything, these companies started focusing on selling to virtual assistants who wanted to specialize in OTM. This was a smart move because now salespeople don't have to learn a new tool, yet they can enjoy all the benefits of all that OTM offers through virtual assistants trained as OTM specialists using one or more of these tools. Now the question for anyone considering using OTM is not which tool is best, but rather which tool user (i.e. OTM specialist) best fits your way of doing business.

Here Is How OTM Works...

At this point you may be wondering how an OTM specialist from Osh Kosh can handle or even understand your transaction process in Florida. Clearly there are major differences in the closing process for different parts of the country. For example, California and Nevada use escrows while most of the rest of the country uses attorneys. Even salespeople within the same office will have their own preferences as to how the transaction process is handled.

However, a process is a process which is just a series of well defined steps and contingencies. The beauty of OTM tools is that they can typically be configured to handle nearly any kind of transaction process. If you were to hire an OTM specialist to manage your transactions, here are the steps you would likely encounter:

SETUP

• The OTM specialist will interview you to determine the process you use to manage your typical transaction. This includes documents, deadlines, services to be performed, etc.

• They will then ask you for exceptions to the standard process that they might encounter.

• The OTM specialist then creates a transaction management template that reflects your way of managing and closing transactions using the Web-based system of their choice.

After the OTM specialist has set up their system to handle your transactions just the way you need them, they are now ready to start managing your new transactions. (NOTE:The following is just a partial list of what an OTM specialist might do when processing your transactions.)

PROCESS

• You fax all the transaction documents to the OTM specialist, they then load them into the Web-based system.

• They contact you by phone to determine any other details that may be special for this particular transaction and modify the customized template accordingly.

• Passwords are assigned to each party of the transaction so they can view where it is at 24/7 from a Web-browser. (NOTE: They typically will be able to view only those parts of the transaction to which they have been authorized, thus enhancing transaction security.)

• They commence executing the tasks and maintain the deadlines as determined by the process customized for this transaction. This includes making contact with other parties to the transaction and settlement service providers (and documenting the conversations) as per your prior authorization.

• They contact you if it appears there is a problem or 3rd party delays in executing any of the process steps.

• If you request it, they will keep you and/or your client informed as to the progress of the transaction process.

By having an OTM pro handle your transaction management, you are freed up to take in more business, you look more professional in the eyes of your client and you are in more control of the entire process. This last point, the issue of "control" is a big one for most agents. Ask yourself who has more control over their transactions: an agent who tries to do it all herself, or one that hires a professional that day-in-day-out does nothing but OTM? Control is not about doing it yourself, it's about having it done consistently and professionally. In this case, "letting go" of the transaction management process is the way to stay in control.

Compared to the value of your time, OTM is very affordable. Typically, an OTM specialist will charge you a one-time initial setup fee to customize their system to the way you do business. After that they charge by the transaction. Prices usually range from $200 - $350 per transaction with a median price that appears to be right around $250. It is important to note that cost of using the Web-based OTM tools is built into this pricing. If for some reason the transaction doesn't close, many OTM specialists will only charge a minor cancellation fee rather than charge the entire amount.

How To Find And Hire An OTM Specialist

Both Settlement Room and Guru Networks have lists of virtual assistants that have been trained on their systems. However, being trained and being a highly experienced "pro" can be two completely different things. When interviewing an OTM specialist, make sure to ask at least the following questions/requests:

1. How long have you been doing OTM?

2. How many transactions have you managed?

3. How many transactions that you managed failed to close and why?

4. Please provide contact information for 3 - 5 clients for whom you are currently doing OTM over at least the last six months.

5. Please provide contact information for at least 3 - 5 previous clients for whom you are no longer doing OTM. (This is important because you want to find out why they are no longer working with this person.)

6. What happens to my transactions when you get sick or go on vacation?

7. How can you assure me that you are not going to take on so much business that you cannot handle my transactions the way they should be?

8. How much does it cost for initial setup and per transaction?  What does it cost if the transaction fails to close?

When you find someone that can answer the above questions to your satisfaction, grab them quick and make them a partner in your success. Remember, an OTM specialist will free you up, allow you to do more business and stay in greater control of the business you already have going. And when this happens, you have a business that is serving you rather than the other way around.

Mr. Internet is the alter-ego of Michael J. Russer, an internationally recognized Internet speaker, trainer, author, and strategic consultant to the real estate industry. He's dedicated to helping real estate professionals leverage their people skills into profit on the Internet. You'll see his column on REALTOR® Magazine Online every month and in the magazine quarterly. Send your Internet questions to help@askmrinternet.com or you can visit his Web site at http://www.russer.com

This article is reprinted in its entirety from the July 2005 issue of REALTOR® Magazine by permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2005. All Rights Reserved other than mentioned above. Mr. Internet® is a registered trademark and Ask Mr. Internet!™ is a trademark of RUSSER Communications.