How to Start a Real Estate Transaction Coordinator Business

The list of documents and tasks required to complete a real estate transaction continues to grow. In response, the services of a real estate transaction coordinator—or “TC,” for short—are increasingly the key to successful and on-time closings.

This growing reliance on experienced coordinators has helped many real estate professionals start their own transaction coordination company. 

In this guide, you’ll learn how to start a real estate transaction coordinator business of your own in just eight simple steps.

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

First, let’s consider why there is such high demand for transaction coordinators. 

Transaction coordinators keep deals on track. They take care of the administrative aspects of each transaction—from the initial contract to closing.

They have a broad role that varies depending on state regulations. Typically a professional transaction coordinator will:

  • Coordinate property inspections.
  • Manage escrow, mortgage loans and appraisals.
  • Ensure all documentation is submitted.
  • Keep everyone updated on progress.
  • Ensure critical due dates are met.
  • Ensure the database is up to date and accurate.
  • Meet all necessary regulations.
  • Ensure files are securely held.
  • Coordinate the real estate processes from start to closing.

Hiring a transaction coordinator frees up agents to focus on selling properties. This helps to ensure deals close on time, stops documents from getting lost and helps increase revenues. 

It also keeps agents and clients happy and ensures that the business is well-prepared when auditors visit. 

Who Needs a Transaction Coordinator Business?

Some brokerages hire in-house transaction coordinators, while others outsource the service.

Most new real estate agents will coordinate transactions themselves. This is usually because they process fewer deals, which gives them more time to deal with admin tasks. They also have fewer funds available to pay a transaction coordinator. 

But as the business grows they commit an increasing amount of time to sales. This means more revenue but less time, and makes hiring a transaction coordinator more appealing—especially if they begin to make mistakes with their admin.

But hiring an in-house transaction coordinator is expensive, even if they are employed part-time. 

Usually, a small but growing real estate business will hire a virtual transaction coordinator or an external one. This gives them the flexibility to only pay for the services they use. 

This stops them from losing money if they have a period where they don’t close any deals.

As brokerages become bigger and their minimum revenue increases, it is possible to hire an in-house transaction coordinator. However, some still prefer to outsource the service so they can focus exclusively on sales. 

Is Being a Transaction Coordinator for You?

If you’re considering starting your own transaction coordinator business, chances are that you have experience in the role. 

But if you don’t, it’s worth considering if it’s definitely for you. For example, perhaps you are currently a licensed real estate agent. 

Transaction coordinators need to have a very different set of skills and characteristics, including:

  • Attention to detail
  • The ability to consistently meet deadlines
  • Happy to be desk-based and perform admin tasks
  • Customer-oriented
  • Able to make critical decisions
  • Logical and process-driven approach
  • Good communicator

Eight Steps for Setting Up Your Transaction Coordinator Business

It’s worth noting that the steps below are general and will differ depending on a number of factors. For example, some states may require you to get your real estate license to become a qualified transaction coordinator. 

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 in the process. Do some research and brainstorming to pick a name that’s simple, professional, and reflects your business values.

It’s also important to consider a name that has keyword value for future search intent. In other words, choose a name that’s aligned with the real estate industry and your transaction coordinator business service offering. Finding a name with keyword value will help ensure that your business name is aligned with online search intent and discoverability.

Transaction coordinator pro tip: After you’ve selected a name, purchase a website domain that’s an exact match—or as close of a match as possible. It may be difficult to buy a .com domain name with your actual business name. Look into other top-level domains such as .realestate or .realty. 

2. Set Up Your Legal Business Entity

Next, you’ll need to set up your business. One of the most important things you need to decide when starting up a real estate transaction coordination company is the type of business structure you want to use.

Setting up your business as an LLC or sole proprietor means very different things when it comes to business management, taxation, and liability. This step is incredibly important, and it’s necessary to conduct proper research and due diligence before deciding on a business structure and filing the required legal paperwork.

Transaction coordinator pro tip: The Small Business Administration has some valuable resources here. It’s also advisable to consult a business formation or incorporation lawyer. 

3. Acquire the Right License

Real estate practice is governed by legislation at federal, state, and city levels. 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 non-compliance, so it’s essential that you understand real estate compliance standards in your jurisdiction.

The license you need to operate as a transaction coordinator depends on the state where you live and work. If you plan on providing services to different clients across different states, you will need to apply multiple standards at the same time because each state has specific licensing rules.

For example, in Texas it’s illegal  to work as a transaction coordinator without a license. Research the laws that impact real estate transaction coordinators in your state to ensure that your business is properly licensed.

4. Learn the Basics of Real Estate Transaction Coordination

There are various skills you need 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 so that you can better serve your clients.

Here are just some of the basics that you’ll need to develop a complete understanding of:

  • The right real estate terminology for communicating with real estate agents, brokers, appropriate vendors, and other professionals.
  • The real estate transaction process from start to finish. The exact process will differ from one area to another and will depend on more than a dozen factors, such as financing, property type, property condition, and representation.
  • How to market your services properly to recruit real estate agents and connect with brokerages.
  • The right communication methods when dealing with agents, brokers, buyers, and sellers. You can communicate via email, but for urgent queries you should pick up the phone.

5. Choose the Right Transaction Coordinator Software

Next, you will need to find the software for your transaction coordinating business. As a real estate transaction coordinator, you will manage many of the administrative tasks associated with real estate 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

What makes this more difficult is that you’re often required to manage these tasks in more than one system. Many brokerages, even in the same area, utilize several real estate transaction management software products at once.

To start and grow your company, you’ll likely need to choose transaction coordinator software that works alongside any system that a broker or a real estate agent uses. If not, you may end up paying for features that you don’t need and that over-complicate your process.

Often, you will need to create unique workflows for every agent and brokerage you work with. This allows you to work seamlessly with any tools used by agents. 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 real estate transactions have missing documents, and send cover letters with transaction milestones.

6. Set Your Rates

Typically, real estate transaction coordinators charge a fee for each closed transaction. The fee is often variable and can depend on several factors, such as:

  • The type of clients you work with
  • Experience
  • Location
  • Level of service

It can be challenging to set rates, especially if you’re just starting as a transaction coordinator and new business owner. Search online for what the competition charges. If you can’t find local transaction coordination companies to compare, consider looking at other states. Many transaction coordinators work with agents across multiple states, and they may still be your direct competitors.

You will also need to decide how you are going to charge clients. Most transaction coordinators invoice clients on project completion, or at the end of the month for longer-term or rolling contracts. Some transaction coordinators, however, ask clients to pay up-front. 

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 feel time consuming and expensive, so it’s essential to find creative ways to spread the word and acquire clients.

Consider the following tips:

Transaction coordinator pro tip: Offer to coordinate the first deal for free for potential clients. This is a great way to generate leads, and once the deal closes it’s an easy way to secure a paying customer for every new transaction. 

8. Ask for Testimonials and Referrals

Testimonials are an excellent way for you to secure more work in the future and provide you with some much-needed credibility when you’re starting out. Never 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 channels. 

Referrals are just as necessary. Fortunately, referral marketing is long-established in real estate and no stranger to the clients you’ll work with. Test out referral incentive opportunities such as discounts, free coordination, and other perks for those who refer new clients to you.

Want to Make It in the Real Estate Industry? Try Paperless Pipeline. 

Are you looking to become a real estate transaction coordinator? Follow the steps on this list and you could be making money in no time at all. 

This role is great if you crave some flexibility and want to work from home and become your own boss. 

Following the tips above will maximize your chances of success. For even better results, automate your day-to-day tasks with transaction coordinator software like Paperless Pipeline.

To find out more, check out our guide on how transaction coordinators benefit real estate businesses.

Or if you are a broker or real estate agent looking to improve your transaction management process, then check out our 10 ways to save time managing real estate transactions or our transaction coordinator checklist for real estate agents. 

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