How much will Realtors pay to manage the transaction online? A snowstorm of transaction management suite service providers are betting that the tool will be a new revenue generator. What remains to be seen is whether streamlining the transaction helps put money in brokers' and agents' pockets, or adds a prohibitive layer of costs to doing business online.

Realtors are being inundated with software suites to purchase from personal and office management, to presentation software, to showing software, to offer management, to transaction management and finally closing software. For the wired Realtor, putting the whole transaction online makes sense. Brokers and agents can manage it, and be the ones in charge of the other players who participate. Individually, the management pieces make sense, too, but with so many players creating so many individual pieces, will having total systems be cost-effective or cost-prohibitive for the broker and agent? Will one or two systems emerge that offer all the pieces at a reasonable participation fee?

In my book, Homesurfing.net: The Insider’s Guide to Buying and Selling Your Home Using the Internet, I predicted that online transaction management was the coming thing. Many view it as the only way to restore the Realtor to the center of the transaction by putting the listing agent and/or the buyer’s agent in charge of coordinating events. Others say that agents perform this function anyway, but I can speak from personal experience (as both a seller and a buyer) that agents assume that other professionals will deliver their piece of the transaction on time, and many times they don't. The red flags and prompts that are incorporated into the automated platforms urging agents to take action, I believe, will be invaluable in keeping closings on track and out of danger of falling apart.

That’s where the primary worth is for agents and brokers. With transaction management software, the agent in charge can put in the players who will be allowed access to certain pieces of information including the buyer and seller, set the dates for events such as appraisal and inspection, and post the results for all parties who need to see particular documents and information.

Of primary worth to the big guns which are creating transaction management platforms are the lucrative partnerships involved. National lenders and others will pay a premium to be part of any transaction engine with a ready customer base such as those offered by the N.A.R. and Homestore, or Homeadvisor Technologies, Inc. Other companies such as Onepipeline.com have been able to acquire venture capital easily, based on its transaction management system which is called by another name - a compliance engine. This RESPA-compliance device allows Realtors, at no cost to themselves and through free training, to earn the origination fee by managing the loan process online.

At the local level, the transaction engines will provide marquee name lender and title companies, along with access for favorite local service providers of the broker and agent. This could offset the costs of participation and even turn the enterprise into a revenue generator for the broker, depending on how expensive participating in the mulitple platforms turns out to be.

Real estate companines are not necessarily waiting for the big companies to come through with a system - they are producing their own transaction management cabals. Ninekeys.com, is the parent company of on and offline real estate and financial companies, with one of the largest Coldwell Banker brokerages in the nation as its subsidiary. The company has determined that there are nine "keys" to the transaction and has formed itself with the appropriate partners: PropertyKeys, MortgageKeys, RemodelingKeys, RelocationKeys, TitleKeys, InsuranceKeys, Closing/EscrowKeys, InspectionKeys, UtilityKeys, MyHomeKeys and ConciergeKeys.

So let me make another prediction - transaction management will be a success, but not until it is cost-effective for brokers and agents. That means that a lot of consolidation of costs and services into easy-to-integrate suites happens. Some big namees will disappear in good and bad ways. Either they will be lucky enough to merge with a bigger company, or they may disappear because they failed to find a customer base.

In other words, a good idea for a good piece isn’t enough - these companies have to have a proven customer base to be valuable, and they must be willing to value themselves appropriately so they can be bought, merged, or participate in an alliance with their piece of the transaction fairly priced in relationship to the other pieces in the system.

And that is the challenge - fair pricing among competitors. The big guns on the Internet are creating their own proprietary platforms. What will the competition between these giants ultimately cost the brokers and agents? Will brokers get a great deal or not?

Consolidation and acquisition efforts are already beginning to reveal a trend, which indicates that brokers and agents might ultimately benefit in better services and possibly better pricing, if the competitors can deliver the total system at a reasonable price.

Homes.com, a leading competitor of Homestore’s purchased PREP™ Software and hired its CEO, Pat Zaby to become the vice president of channel marketing at Homes.com. Prep is among the most popular broker/agent productivity and presentation software on the market, with a customer-base of over 20,000 agents.

Another example of the consolidation trend is Homestore’s acquisition of Wyldfyre, an MLS software company with a pre-existing customer base of 100,000. Homestore plans to use the software in its transaction management platform that it will shortly offer in partnership with the N.A.R. Wyldfyre was also instrumental in the development of the Realtors® Electronic Transaction Platform. The RETS standard is designed to give Realtors a business-to-business platform for ordering services, coordinating the closing process, and exchanging data and documents. Contributing between $150 to $200 million are Homestore and its subsidiary Wyldfyre, the N.A.R., GMAC Real Estate, GMAC Mortgage, Fannie Mae, RE FormsNET, VeriSign, Prudential and RE/MAX.

This cartel signals another trend besides acquisition, the underwriting of proprietary platforms by key participants.

Not to be outdone, Homeadvisor Technologies, Inc. guarantees the lowest cost loan and the fastest loan closing to consumers who use MortgageDirect, the company’s loan platform developed in partnership with a list of marquee names - Microsoft, Freddie Mac, Chase Manhattan Corp., GMAC-Residential Funding Group, Bank of America, and Norwest Mortgage, among others. The loan platform will also be offered through Realty Desktop, an office and transaction management suite for brokers and agents developed under the productivity tools division of HT, Inc. The company’s first acquisition was Tuttle Decision Systems, which makes the Electronic Services Platform, a linking platform for data capture, decisioning/underwriting engine, and third-party service provides to mortgage pricing conduits in the secondary market. That means that Homeadvisor is first to the party with a national transaction management platform.

Homebid.com has already taken its offer management platform to brokers, signing up nearly 30 of the largest brokers in the nation to participate in e-homesales. E-homesales are an elegant evolution of the auction, a presentation hybrid in which information about the home including disclosures, inspections and other potential deal-breakers are posted for buyers up front. Using the system, brokers and their Realtor-represented buyers can access the homes and the information, and post offers online, all while viewing the offers made by competing buyers.

Although the company says the e-homesale is not an auction, it is an event. Homebid has arranged e-homesales in conjunction with Yahoo! Real Estate to give the participating homes a unique marketing advantage outside of traditional MLS listings and newspaper advertising, and the company says it is open to using other sites with high-volume traffic. Homebid has been successful in getting participating agents to pay $250 per listing for the offer management piece, but when the others launch their transaction management platforms, also targeting the broker and Realtor to fund the platform, there may emerge a price resistance. Seeing that train coming down the track, Homebid is already searching for a transaction management partner and may announce an alliance or merger soon.

The costs to brokers and agents who take advantage of all or most of the suites available have yet to shake out. Transaction management along with other business suites, might possibly be most cost-effective when provided by the large traffic sites. They can afford to piece together as many modules as possible, bringing a complete Internet solution to the problems of business, offer, loan, transaction and closing management solutions, as well as after-closing services.

Published: May 31, 2000

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.