There are few industries that are as highly competitive as the real estate business. To stay current and keep up with the competition, Realtors and title companies are likely to update their business models within the next few years. According to the National Association of Realtors, the industry is facing several unique challenges that may hamper its success in the future. These concerns can be addressed with document management software (DMS) and improved business process management.
Challenges for the Real Estate Industry
The real estate industry will be facing unique challenges within the next several years. According to a frank “DANGER” report commissioned by NAR, the real estate industry must face these challenges to successfully overcome them.
One of the most important concerns in the report is the lack of education and training of real estate agents. The typical commission of 6 percent that real estate agents charge is also under attack, because that fee is high compared to other countries. As a response to high commissions, real estate agencies now have to compete against brokers and agents who are exploring new business models. Last but not least, most real estate agencies face compliance issues with federal regulatory policies.
All of these issues and emerging trends can be drastically simplified and streamlined by using DMS.
Education and Training of Real Estate Agents
There is no question about it—becoming a real estate agent is probably one of the quickest career paths. In most states, it takes only 70 hours of training or less to receive a real estate license. Consequently, many real estate agents don’t really know enough about the business they’re in.
While your agency can’t change the education requirements on the state level, managing brokers can certainly ensure that their employees have the information and tools they need to succeed at their job. First, they can institute additional employee training where established agents show new agents how things get done. Second, they can use DMS to ensure that agents can find the information they’re looking for.
Use Workflows and Templates to Streamline Processes
Real estate agents have to take care of a lot of paperwork when listing, showing or selling property. Fortunately, you can use workflows to streamline each process and make sure that nothing gets left out. You can also use templates to create the paperwork you need. For example, you may need to ask the seller to perform upgrades or repairs found necessary during the home inspection. Your template can make it easier to draw up a legal document that leaves nothing out.
Explore New Business and Pricing Models
Your agency may be interested in exploring new business and pricing models that allow consumers to save money while still keeping your agency running. When you use DMS for your business process management, it can be easier to find where you can cut operational expenses without limiting the quality of interactions between your organization and your customers.
One of the things you can do to lower your expenses is to move toward becoming a paperless organization. It can be challenging for the real estate industry to reduce paperwork, but contracts and agreements are legally binding in electronic form as well.
Your agency may decide to offer services separately to its customers. For example, your customers may decide to pay for listing their property, reviewing or drafting a purchase contract or researching a deed. You can even offer a hybrid of old and new methods, where you’ll still use the commission-based model for buyers and sellers who prefer to do it that way.
One of the advantages of not tying your earnings to a commission percentage is that your real estate agents won’t feel obligated to show only higher priced listings. This in turn will draw customers to your agency.
Compliance with Regulatory Policies
Realty brokerages have to comply with many regulatory policies. In reality, most agencies are in violation of the Consumer Financial Protection Bureau’s anti-kickback and referral-fee rules governing brokers’ financial arrangements with title companies, lenders and others. But in NAR’s “DANGER” report, it becomes apparent that most brokerage companies are either ignorant of this fact or believe mistakenly that they’re in compliance. That’s a huge concern for the industry.
The good news is that DMS can help your organization streamline its operations, which will make it easier to become compliant with all of the applicable policies. At the same time, DMS can keep your documents safe and secure and prevent unauthorized access.
Streamline Operations with Document Management Software
Realtors and title companies can greatly benefit from streamlining their operations with DMS. DMS can save your company time and money because your agents will no longer spend hours looking for documents. You can also streamline your processes and ensure that no step is forgotten by utilizing workflows and templates.
Matt Peterson is the CEO of Lehi, Utah-based eFileCabinet, Inc. Founded in 2001, eFileCabinet, Inc. began as a cutting-edge tool to digitally store records in accounting firms. As it grew in popularity, eFileCabinet developed into a full-fledged electronic document management solution designed to help organizations capture, manage and protect their data.