Transaction Coordinator Misconceptions | First Tuesday newspaper

Transaction coordinators and brokers

A sales agent employed by a broker is the broker’s agent. In turn, the broker is the client’s agent.

As an agent representing the broker, a real estate sales agent is authorized to prepare:

  • Advertisement;
  • sales documents;
  • disclosure sheets; and
  • other documents in the broker’s name.

The broker employing agents is bound under California Department of Real Estate (DRE) Supervision Regime at reasonably supervise commercial agent activities.

Reasonable supervision includes establishing policies, rules, procedures and statements to review and manage:

  • transactions for which a real estate license is required;
  • documents that materially affect the rights or obligations of a participant in the transaction;
  • the filing, storage and maintenance of transaction documents;
  • management of trust funds;
  • advertisements of services requiring a license;
  • knowledge of anti-discrimination laws for commercial agents; and
  • sales agent activity reports. [DRE Regulations §2725]

The broker may employ other licensees, such as a Administrative Officer Where transaction coordinator (TC)to carry out their supervisory responsibility to review documents and maintain records. [See RPI e-book Agency, Chapter 5]

However, even if the broker employs the services of an office manager or a transaction coordinator, the broker retains overall responsibility supervisory responsibility. Thus, the broker must ultimately review the actions of the office manager, the transaction coordinator and, in turn, each commercial agent. [DRE Regs. §2725]

Transaction coordinator tasks

A CT is a licensed or unlicensed person who assists an agent or broker in the processing of documents, agreements and disclosures in the file of a real estate broker.

The TC takes care of several critical administrative tasks to manage a client’s file, including:

  • verify that all documents and addenda bear the required signatures and initials;
  • confirm that required addenda and disclosures are included in the purchase agreement;
  • deliver copies of the purchase agreement to the other agent, buyer, seller and lender (as instructed by the agent);
  • ensure that all documents are provided to participants in the transaction;
  • complete brokerage fee disbursement forms;
  • coordinate arrangements with the title company, receiver, appraiser or lender;
  • open and update title search;
  • maintain client contact details, property address and property photos;
  • ensure that records are kept with the agent’s employing broker;
  • send deadline reminders and keep participants informed of the status of the transaction;
  • follow up with the escrow company, lender or other agents on the transaction as needed;
  • when working for a seller’s agent, send reminders to move the locked box and update the status of the listing on the Multiple Listing Service (MLS); and
  • disburse follow-up FARMing flyers on behalf of the agent.

In short, the purpose of the TC is to organize and follow a client’s file from start to finish, ensuring that the transaction runs smoothly, that all deadlines are met and that the files are correctly preserved.

Related article:

Form of the Week: Transaction Coordination Sheets for Seller’s and Buyer’s Agent — RPI Forms 521 and 521-1

Employing broker functions

A Real estate broker is a person who is employed for remuneration by another, such as a buyer or seller, to carry on any of the activities listed in the licensing act’s definition of a broker.

These activities include:

  • sell, buy, offer or negotiate the purchase, sale or exchange of real estate or a business opportunity;
  • soliciting listings of places to rent;
  • assist in applying to purchase or lease state or federally owned land;
  • solicit, negotiate on behalf of or perform services for borrowers or lenders for immovable mortgages; and
  • sell, buy, offer, exchange or render services on a contract of sale of real estate or a promissory note secured by a lien on real estate or on a business opportunity. [Calif. Business and Professions Code §10131]

Brokers are in a distinctly different category from sales agents. Brokers are authorized to deal with members of the public offer, contract and render brokerage services for remuneration, called authorized activities. Commercial agents are not.

Related article:

Management Styles: How Brokers Run an Office

All brokers are TCs

Some brokers tell themselves when they hire a TC, their record keeping responsibilities cease and they are released from monitoring obligations. But the overall responsibility for maintenance still rests with the broker – not the TC. All records held at the brokerage ultimately belong to the broker.

The acts of a sales agent or broker are considered to be the acts of his employing broker. The broker must ensure that proper updating of files is carried out, even if it is part of a TC’s responsibilities.

Document review and record keeping by the TC is not just a mechanical function. It includes a meaningful review the activities of each salaried licensee concerning:

  • location of errors, such as in mathematical calculations, and in contractual and escrow provisions; and
  • completeness, accuracy and timeliness of disclosures.

TC is mainly concerned with the fluidity and efficiency of transactions. The TC ensures that the commercial agent corrects any unacceptable document as soon as possible by bringing it to the attention of the commercial agent.

The broker, on the other hand, is concerned with the compliance of the documentation according to the DRE regulations and the law of the real estate code and the actions of their employees, whether licensed or not.

Thus, all brokers are TCs, but not all TCs are brokers.

When acting as TC, the TC has a duty of supervision to the employing broker. It is the broker who, in turn, is responsible to the customer for any breach of agency duty caused by the TC’s inability to oversee and correct an officer’s errors and omissions.

Although most supervisory responsibilities may be assigned to an office manager or TC, the duty of agency that the broker owes to a client in a transaction may not be delegate to others. [See RPI e-book Agency, Chapter 5]

Related article:

Effective Marketing and Closing with a Deal Coordinator

Want to learn more about how a broker uses supervisors? Click on the image below to download the RPI book cited in this article.