I’m excited about the momentum and excitement around transaction management. A great product built by some great people got picked up last week and we can’t wait to see what they’ll build together. At the same time, lots and lots of new entrants are driving innovation in the category which is putting healthy pressure on brokers to get moving on picking a transaction management solution to manage the flow of paperwork and deliverables that accompany every transaction. Huzzah to that.
But I’ll be blunt: transaction management is only half the battle. Manage docs, signatures, and some initial deliverables. Set alerts for key deadlines. Store everything in one place. This is all a great start- but for the buyer, it truly is only a start. Let’s unpack a common transaction management task like “remove loan contingency” for a moment. Does reminding your buyer to remove their loan contingency or upload their loan commitment letter help them at all? “Hey Paul, go get your loan sorted.” Or, “Hey Paul, go get your inspections sorted.” Um, okay, but now what? Where do I start? What’s going to be expected of me? What can I do now, when I have X days left on this contingency, that is going to make this transaction go smoothly, or am I just going to be innundated with requests as they come with little to no warning? How can I avoid surprises?
A quick anecdote from my own homebuying experience: gosh the missus and I loved this house. Made an offer. Counteroffer. Signed contract. Credits. And then, the night before closing, we get a call from our attorney:
“Looks like there’s a lien on the title. Yeah. Sewer assessment. Seller’s attorney says he’s not paying. Won’t show up to closing tomorrow.”
I’m sure that wasn’t a fun phone call for him, but you can imagine how the wife and I felt. Certainly outrage at the seller for trying to pull such a dirty trick at the 11th hour, but that was nothing compared to the confusion. What about this needed to wait until the day before closing to be revealed?*
Turns out a lot of transactions don’t have title run until the last minute for various reasons. We can get into that in another post, but suffice to say that if I’d known it wasn’t something attorneys always do right after a buyer is in contract, I would have happily paid the few hundred bucks to make sure it got run with enough time to negotiate, plan, and rebut without our feet to the fire and a moving van ready to go (and hence the task in Closing Time “Verify title is clear of all liens and assessments,” due nice and early).
“But Paul, that’s your transaction. Such a corner case…most transactions don’t have liens that only show up the night before closing,” you might say.
And yes, you’d be right. And as we built Closing Time, we began to see a lot of transactions. And we started to see a lot of what appeared to be ‘corner cases.’ And then we saw that almost every transaction, in one way or another, is unique. Each one is a snowflake. Different financial circumstances. Different disclosures. Different buyers, borrowers, lenders, and different rules in different states, counties, cities, and developments. The couple who just got married and received cash they’re going to need to document for their lender, who were self-employed for half of last year and own another property out of state. You get the idea.
To summarize: sure, every transaction starts out looking pretty much the same, but 90% of the work a buyer is responsible for just isn’t represented by transaction management systems, and rightly so. If transaction management systems had to incorporate every situation, every snowflake, for every party and for every document in the transaction, they’d be unweidly and unusable yuckware instead of the amazing utilities they are today.
And this is where we see Closing Time making life easier for you, and making life a lot easier for your buyers. A fully customized conceirge that guides your buyer through that 90% they have to manage when they’re buying a house, alongside and integrated with your transaction management platform. And in fact, in the coming weeks we’ll be announcing our first integration with one of the most prevelent transaction management platforms out there- so sending your buyer their plan toward closing will be as easy as clicking a button and letting our technology do the work. So that for each snowflake of a transaction, your buyer can feel confident and informed – and stay on track.
*So how’d my transaction work out? While state law (and our contract) indicates clearly that any assessments (sewer or otherwise) be taken care of by the seller, our seller was intent on nonperformance and dragging the transaction into a court battle, as he felt he agreed on too low a price anyway. Sadly, we wound up settling with him and paid a portion of the assessment to get him to close. Life before Closing Time…