Ready to rid yourself of all those files and stacks of stuff on your desk? Then dump that paper mess and go paperless!

One of the most intriguing ideas from Real Estate Connect is the "paperless" transaction. While thought leaders have toyed with this idea for over 10 years, the technology is finally available to make this a reality. "Paperless" means every aspect of every transaction will be handled on line.

Using paper to track transactions is extremely inefficient. Transaction coordinators, listing coordinators, and agents fill out the seller's and/or buyer's name, address, and phone number at least 10-20 times in a typical transaction. There must be a minimum of six sets of documents (buyer, seller, agents, brokerage, closing agent) copied and distributed as well. Phone calls must be traded to schedule appointments, faxes of reports must be sent, and someone must manually track contingency dates. Time better spent on prospecting or working with clients is wasted on tedious file management.

As an agent, you won't be able to eliminate the paper from your business unless your broker is prepared to go 100% paperless. Having some agents using on-line tracking while others use paper doubles the work and frustrates everyone involved. What does it take to go paperless?

1. Logistics
The listing coordinator enters the listing information into the system one time and then the data is automatically "populated" (i.e. inserted) into all the other documents in the transaction. When the agent represents a buyer, data is first "populated" from the purchase contract.

Transaction tracking systems allow the coordinator to check off each event as it is completed. The system logs when reports are posted, when buyers and sellers pick up reports, when vendors post their information, etc. Reports, disclosures, and other original documents cannot be unilaterally modified by any of the parties in the transaction. In the rare case where the seller or buyer does not own a computer, agents can print out a copy for the client. Alternatively, the broker can provide the client with one of the new devices that accesses Internet information from their television.

2. Signatures:
With the new tablet computers, you can now obtain an on-line signature right on your tablet PC. In the case where the client is not web savvy, agents can print out the document and then fax the signed document back to the office on-line fax. The document is then accessible to be downloaded into the transaction tracking system. The same is true for vendors. The computer based fax system can download the vendor's report directly into the transaction tracking platform.

3. Cost:
Transaction coordinators range from $150-$500 per transaction. Even with this fee, many offices still take a loss on this important service. To cover the cost, agents pay a transaction fee as does every vendor who uses the system. Ultimately, all parties to the transaction must have their data posted to the transaction tracking platform. Typically the agent will pay their normal transaction fee and vendors will pay a $10-$20 fee per transaction.

4. Selecting the best system:
The first step is selecting a transaction tracking platform. Begin by determining whether or not the system is compatible with your local MLS and can pull down MLS data. Since many U.S. Multiple Listing services use Rappatoni software, a key question to ask is whether or not the system is compatible with this platform. It's also important to evaluate the strength and experience of the company. Make sure the company you select has the experience and financial wherewithal to be in business five years from now.

5. Benefits:
The biggest benefit of going paperless is the time savings. One broker said his company requires 93 different steps to close a transaction. Almost every step begins with someone writing the names, addresses, and phone numbers of the principals. Eliminating 92 of those steps represents a huge savings of time and money. Second, the on-line system is available 24/7. Parties check in at their convenience rather than playing telephone tag. Third, tracking 93 different transaction steps using paper is a nightmare. In contrast, when each step is logged on the computer, tracking becomes simple. Fourth, in terms of risk management, there is a clear record of who completed what tasks and when the tasks were completed. Fifth, no paper means no lost documents, virtually no storage costs, and a clear "digital" trail showing all required steps in the transaction were completed prior to closing.

6. Caveats:
Daily backup is an absolute must. In addition, storage must be secured at multiple sites in case there is a fire or other disaster. Third, existing open files will have to be converted from paper to digital prior to launching the paperless effort.

#####

Paperless is great for your office, but what about the downside of more people going digital—spam. If you'd like to dramatically reduce the spam you receive, watch for next weeks's article, "Can the Spam."