How to Start a Real Estate Transaction Coordinator Business

There are currently over 6,030 transaction coordinators in the U.S. So, if you’re considering starting your own business as a real estate transaction coordinator (TC), you’re up against some tough competition.

However, the services you would provide as a TC are in high demand. These services are increasingly important to getting more clients and closing deals successfully and on time.

Let’s look at why:

As you can see, there’s potential for you to run a highly profitable transaction coordination business in the real estate industry.

In this guide, you’ll learn what a TC does and how to launch your own transaction coordinator business in just a few simple steps.

What Is a Transaction Coordinator and Why Are They Critical to Real Estate Businesses?

Transaction coordinators keep real estate deals on track by handling the administrative aspects of each transaction, from the initial contract to closing. 

They have a broad role, with duties varying slightly depending on state regulations. Typically, a professional transaction coordinator will:

  • Coordinate property inspections.
  • Manage escrow, mortgage loans, and appraisals.
  • Ensure that all relevant documentation is gathered and submitted.
  • Keep everyone updated on the progress of the transaction by sharing relevant information.
  • Meet all critical deadlines.
  • Ensure that the client database system is up-to-date and accurate.
  • Adhere to all the necessary regulations.
  • Ensure file compliance.
  • Coordinate the real estate processes from start to closing.
  • Respond to sales agents.
  • Handle contract preparation, coordinate title insurance, and communicate with title companies.

Based on the list above, it’s fair to say that a TC plays a vital role in a real estate brokerage.

Hiring a great transaction coordinator frees agents up to focus on what they do best, selling properties. In fact, agents report a 25% increase in productivity when working with a TC.

This helps to:

  • Ensure every real estate deal closes on time.
  • Prevent documents from getting lost.
  • Increase revenue, as you’ll likely be closing more deals successfully.

Having these tasks handled professionally also keeps agents and clients happy, as over 90% of clients feel more confident when a TC is involved in the buying or selling process.

What Is the Difference Between an Admin and a TC?

An administrative assistant typically handles basic day-to-day tasks such as paperwork, while a TC specializes in transactions specifically.

Who Would Use an Outsourced Transaction Coordinator?

Some brokerages hire in-house transaction coordinators, while others outsource this role to part-time or virtual transaction coordinators.

Many new real estate agents and brokers coordinate transactions themselves because they process fewer deals, which gives them more time to handle administrative tasks. They also typically have fewer funds to pay a transaction coordinator. 

However, as their business grows, they must commit more time to sales, meaning more revenue but less time to manage the transaction process. 

This makes hiring a transaction coordinator a great fit, especially if oversights and mistakes begin to surface. Also, closings managed by a TC have 80% fewer errors and delays.

However, hiring an in-house transaction coordinator is expensive, even if they are employed part-time. This is especially true because the average salary for a TC is $46,821 per year.

Usually, a small but growing real estate business will hire an external or virtual transaction coordinator. This gives them the flexibility to pay only for the services they use and prevents them from potentially losing money if they have a period where they don’t close any deals.

As brokerages grow and their revenue increases, hiring an in-house transaction coordinator may become necessary. In fact, 70% of agents who hire a TC experience significant business growth. However, some still prefer to outsource this role so they can focus exclusively on real estate sales. 

Is Being a Transaction Coordinator for You?

You may be wondering if fulfilling this role and starting your own business is the right move for you.

If you’re considering starting your own transaction coordinator business, it’s likely you already have experience in this area. You don’t need a college degree to become a TC, but some experience will be helpful.

However, you must consider whether committing solely to this role is your best option, especially if you’re a licensed real estate agent.

The best transaction coordinators need to have a very specific set of skills and characteristics, including:

  • Attention to detail.
  • The ability to consistently meet deadlines.
  • Being customer-oriented.
  • The ability to make critical decisions.
  • A logical and process-driven approach.
  • Excellent communication skills.

8 Steps for Setting Up Your Own Transaction Coordinator Business

Now that you know there’s a demand for transaction coordinators and that your business may have a high chance of success, it’s time to start setting it up.

It’s worth noting that the steps below are quite broad and will differ depending on several factors. For example, some states may require that you obtain a real estate license to become a qualified real estate transaction coordinator. 

Below are eight steps you need to follow to set up your own transaction coordination business:

1. Choose a business name

Choosing the name of your transaction coordinator business will likely require some thought, but it’s often one of the more straightforward steps. 

Research and brainstorm to pick a simple, professional name that reflects your business values.

This transaction coordination business has chosen a compelling name for their company: The TC Advantage:

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Consider keyword value

It’s also important to consider a name with keyword value for people to find via Google. In other words, choose a name that aligns with the real estate industry and your service offering. 

When setting up a real estate office, a business name with keyword value will help ensure your name is aligned with online search intent and discoverability when you start your marketing activities.

2. Set up your legal business entity 

Next, you’ll need to establish your business as a legal entity. The type of business structure you choose is one of the most important decisions when starting a real estate transaction coordination company.

Setting up your business as an LLC or sole proprietor has very different implications regarding business management, taxation, and liability. 

You must conduct proper research and due diligence before deciding on a business structure and filing the required legal paperwork.

3. Acquire the proper license

Real estate practice is governed by federal, state, and city legislation. Given the complexity of real estate law and practice, you’ll need to familiarize yourself with the requirements and regulations mandated by your state. 

Brokers can face penalties for real estate noncompliance, so you must have a firm grasp of real estate compliance standards in your jurisdiction.

The real estate license you need to operate as a TC depends on the state where you live and work. If you plan to provide services to clients in different states, you will need to apply multiple standards simultaneously because each state has its own specific licensing rules.

For example, working as a transaction coordinator without a license in Texas is illegal.

Research the laws that impact real estate transaction coordinators in your state to ensure your business is properly licensed.

4. Learn the basics of real estate transaction coordination

You’ll need various skills to become a successful transaction coordinator. Even if you’re an experienced TC or real estate professional, spend time learning the basics beyond what you know to serve your clients better.

Here are just some of the basics that you’ll need to understand:

The right real estate terminology

You’ll need to know some basic real estate terminology to communicate professionally with real estate agents, brokers, appropriate vendors, and other stakeholders.

The real estate transaction process from start to finish

The exact process differs from one area to another and depends on many factors, such as financing, property type, property condition, and representation. You’ll need to understand the entire transaction process, from listing to closing.

How to market your services properly

You’ll need to find suitable platforms to recruit real estate agents and connect with brokerages.

The right communication channels

You must establish the proper channels for dealing with agents and brokers, potential buyers, and sellers.

5. Choose the right transaction coordinator software

You will need to find the ideal software for your transaction-coordinating business. As a TC, you’ll manage many administrative tasks associated with transactions. Common tasks include:

  • Managing listings and contracts.
  • Coordinating open houses.
  • Handling titles and escrow.
  • Expediting mortgage loan and appraisal processes.
  • Organizing inspections.
  • Assisting in negotiations.
  • Following up on the completion of repairs.
  • Communicating with agents, brokers, buyers, and sellers throughout the real estate transaction process.

The problem with real estate software

What makes this challenging is that you’re often required to manage these tasks across multiple systems. 

Many brokerages, even those in the same area, simultaneously use several real estate transaction management software products.

What to consider when choosing your software

To start and grow your company, you’ll need to choose transaction software that works alongside any system a broker or real estate agent might use.

Choosing Paperless Pipeline

You will often need to create unique workflows for every agent and brokerage you work with, and Paperless Pipeline can help you do just that.

The software allows you to work seamlessly with any other tools agents use, with over 3,000 app integrations available. 

It also enables you to automate transaction coordinator checklists for listings, acceptance, loan approval, option period, and appraisal dates in one system.

You can also:

  • Keep clients up-to-date.
  • See which transactions have missing documents.
  • Send cover letters with transaction milestones.

6. Set your rates

Typically, TCs charge a fee for each closed transaction, which is often variable and can depend on several factors, such as:

  • The type of clients you work with.
  • Your experience.
  • Your location.
  • The level of service you provide.

Here’s a general idea of what coordinators charge in the U.S. per hour:

Coordinators’ fees also vary by state. For example, the per-hour fee in South Carolina is $16.41, compared to $25 in Colorado.

Setting rates or determining your flat fee can be challenging, especially if you’re just starting as a transaction coordinator and a new business owner.

Research your competitors’ rates

It’s a good idea to search online for what your competition charges. If you can’t find local transaction coordination companies to compare, consider looking at other states. 

Many transaction coordinators work with multiple agents across many states, making them your direct competitors, too.

Determine when you will charge your clients

You will also need to decide at which stage you will charge clients for your services. Most TCs invoice clients when a transaction is complete or at the end of the month for longer-term or rolling contracts, while others ask clients to pay upfront. 

7. Start marketing your new company

Once you’re set up and ready to begin coordinating real estate transactions, you’ll need to start marketing and recruiting. 

This part of the process can be time-consuming and expensive, so finding creative ways to spread the word and acquire new clients is essential.

Marketing tips for transaction coordinators

Consider the following tips:

  • You should also check out online forums and TC groups. For example, the Reddit group r/realtors. 
  • Network with real estate professionals on LinkedIn. 

Other marketing tactics to consider

A few popular digital marketing tools you can use to market your new business include:

This transaction coordinator business is using Google Ads, a type of PPC advertising, to market their services:

Source
  • Landing pages: Develop specific landing pages on your website aimed at particular target audiences.
  • Content marketing: Write thought leadership articles, how-to guides, and informative blog posts, and publish them on LinkedIn or your blog to establish credibility.

In the example below, this TC solutions provider publishes helpful, informative articles on their blog, attracting clients who are interested in their services:

Source

8. Ask for testimonials and referrals

Testimonials are an excellent way to secure more work in the future and can provide you with some much-needed credibility when you’re just starting out. Over 70% of people trust a business more after reading positive reviews and testimonials.

This TC business displays great testimonials prominently on their website, helping to build trust with potential clients:

Source

Don’t be afraid to ask for testimonials from your first few clients. If you did a good job, ask a broker or real estate agent to write a quick review about the service you provided. 

You can then quote these testimonials on your website or social media channels, known as social proof.

Referrals are just as necessary as testimonials. Over 50% of U.S. small businesses say that referrals are their most successful marketing tool. 

Test out referral incentive opportunities such as discounts, free coordination, and other perks for those who refer new clients to you.

How to Make It as a TC with Paperless Pipeline

Although there are many transaction coordinators to compete with, there is a high demand for your services. 

If you want to be your own boss, have flexibility, and potentially work from home, this type of business might suit you perfectly. Not to mention that you’ll likely make good profits, especially if you follow the steps above.

If you want your new real estate business to thrive, you need to invest in the right software. With Paperless Pipeline, you can automate your entire transaction process, including your day-to-day tasks, while keeping all parties involved up to date. 

Managing client information, data entry, and closing deals has never been easier! Visit our website to start a free trial and determine whether Paperless Pipeline is the right solution for your new business.