Transaction coordination is the activities in a real estate sale that happen after the purchase agreement has been signed.
Much of the work in real estate happens after an offer is accepted – title work, inspections, appraisal, surveys – and more.
Getting an accepted offer closed typically takes weeks, involves several different players, and requires ongoing communication with all of them.
In this article, we will take an up-close look at what transaction coordination means for real estate sales.
Transaction Coordination – A Step-by-Step Guide
Showing and listing houses is only one part of the real estate business. Once an offer for a property has been accepted a series of steps and processes kick off.
In most regions, transaction coordination takes around a month and requires attention to detail, much paperwork, and hours of communication.
Let’s take a look at these tasks and steps so we can better understand transaction coordination.
1. Transaction Coordination – Title Work
The first part of the transaction coordination process is title work. In real estate transactions, “title work” refers to the process of verifying the legal ownership of a property.
A title examination is an investigation of the property’s history. It’s aim is to identify legal issues or claims that could affect the buyer’s ownership rights.
The examination is a review of public records to establish a clear “chain of title,” documenting the transfer of ownership over time.
Any discrepancies or “clouds” on the title, such as unpaid liens or unresolved legal disputes, are identified during this process.
If a title is free of defects, the title company offers title insurance. This is a policy that protects the buyer against any issues that may arise after purchase.
Moreover, this insurance policy provides financial coverage for legal fees and potential losses resulting from title defects or challenges to ownership.
Agents typically contact the title company several times in the early stages of the transaction coordination process. This is done to check on progress and offer additional information about the sale.
Overall, title work ensures buyers acquire properties with clear and marketable titles, free from any encumbrances or legal disputes.
2. Property Inspections
Next, the second step of the transaction coordination process is the home inspection.
A home inspection is undertaken by buyers to assess the condition of a property before finalizing a purchase. Typically, a licensed home inspector thoroughly evaluates various aspects of the property, including the following:
- Structural integrity
- Electrical boxes and wiring
- Plumbing systems
- HVAC systems
- Roofing and siding
- And also any safety issues
The inspection report provides detailed findings, highlighting any defects, safety concerns, or necessary repairs.
Buyers can then use this information to negotiate repairs with the seller or reconsider their purchase decision.
If necessary, the negotiation process can be time-consuming and include ongoing repairs involving contractors, plumbers, electricians, and so on.
Want to learn how you can pass these tasks on to a transaction coordinator? Then read this post on what is a transaction coordinator?
3. Transaction Coordination – The Appraisal
The third event in the transaction coordination process is the property appraisal.
This step determines the fair market value of a property. Lenders typically require an appraisal to ensure the property’s value is sufficient to support the requested loan amount.
A licensed appraiser conducts a thorough inspection of the property, considering factors such as the following:
- Its size
- Location
- Physical condition
- Prices of comparable sales in the area
- And any unique features of the property
Using this information, the appraiser prepares a detailed report outlining their valuation of the property. This valuation serves as an impartial assessment of the property’s worth, helping both buyers and lenders understand its market value.
The accuracy of the appraisal is crucial, as it directly impacts the buyer’s ability to secure financing. If the appraised value is lower than the agreed-upon purchase price, it can lead to renegotiations about the price or potentially affect the terms of the loan.
Here again, there could be the need for lengthy and complex negotiations, often lasting days.
4. Step Four – A Survey
Property surveys are conducted by licensed surveyors to determine the exact boundaries, dimensions, and features of a property.
These surveys involve precise measurements and analysis of the land, including any structures, easements, encroachments, or potential boundary disputes.
Property surveys provide valuable information to buyers, sellers, and lenders. They help prevent future disputes over property lines and can uncover issues that may affect property value or development plans.
Scheduling the survey, preparing the property, and juggling schedules are additional tasks in the transaction coordination process.
Overall, property surveys are essential for establishing a clear understanding of a property’s physical characteristics and boundaries in real estate transactions.
5. Processing the Mortgage
In real estate sales, the mortgage processing step involves the lender thoroughly reviewing the buyer’s financial information, including income, credit history, assets, and debts.
This process aims to assess the buyer’s creditworthiness and determine the loan amount, interest rate, and terms they qualify for.
During mortgage processing, the lender may request additional documentation, such as pay stubs, bank statements, and tax returns, to verify the buyer’s financial stability.
As mentioned above, the property itself is also appraised to ensure its value supports the loan amount.
Once all necessary information is gathered and verified, the lender makes a final decision on the loan application.
Agents usually maintain weekly contact with the lender to check on progress and address any issues that arise.
However, you can avoid these lengthy, weekly calls by working with a transaction coordinator. Want to know about the costs involved? Then read this post on how much does a transaction coordinator charge?
6. Transaction Coordination – The Closing
The closing event in real estate sales, also known as the settlement, is the final step where all necessary paperwork is signed, and ownership of the property is transferred from the seller to the buyer.
This meeting typically involves the buyer, seller, real estate agents, attorneys (if applicable), and a closing agent or title company representative.
During closing, all financial transactions are completed, including the payment of closing costs, transfer taxes, and any remaining down payment or loan funds.
Once all documents are signed and funds are disbursed, the keys to the property are handed over to the buyer, marking the official conclusion of the real estate transaction.
However, if any issue arises during closing such as missing paperwork, invalid identification, or unexpected changes occur, the agents involved in the sale will need to help resolve these.
By now you’ve realized that transaction coordination is an intensive and time-draining part of the real estate business. Want to take back your time? Then this article on how to save time and money with a transaction coordinator for real estate is for you.
Let AgentUp Make Transaction Coordination Easy!
As you can see, the transaction coordination process is lengthy, engaging, and requires much work and communication.
Successful agents understand that these hours are better spent finding new clients rather than talking to title companies, home inspectors, and mortgage lenders.
Therefore, smart agents hire a transaction coordinator to shepherd the closing process, allowing them to focus on productive tasks that will increase revenue and grow their business.
Let AgentUp connect you with a talented and well-trained transaction coordinator, who can take the busy work off your plate.
Over the past ten years, AgentUp has created an effective team of virtual transaction coordinators in the Philippines, specifically geared towards the US real estate industry.
AgentUp’s transaction coordinators handle more than just administrative tasks. Our highly trained transaction coordinators can do everything from managing paperwork and appointments to prepping closings and keeping your clients informed.
All of our transaction coordinators are fluent in English and accustomed to working across time zones and cultural differences with ease. You’ll enjoy an easy and productive working relationship built on clear communication and shared goals.
Lastly, we take the time to understand your particular business needs and match you with the right virtual real estate transaction coordinator for you.
So, take the first step towards a more efficient, less stressful, and ultimately more successful real estate career.
Schedule a free consultation to learn more about AgentUp’s virtual transaction coordinator services and how they can help grow your business.
Thank you for taking the time to read our post today.
We hope this article helped you better understand what real estate transaction coordination means for real estate sales.
