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Wednesday, March 9, 2011

New Jersey real estate broker goes paperless

New Jersey real estate broker goes paperless

Last April, when real estate agent Carmelo "Mel" Oliveri found out New Jersey had changed a regulation to allow brokers to keep electronic records in place of paper ones, he put himself in gear. Two months after finding out about the change, he founded his own virtual and paperless brokerage, Paramus-basedProperty Hub Realtors.
"The technology is out there (for brokerages to become paperless). Unfortunately, it's underutilized in the real estate world. Everyone says that's the future of real estate, but the future is here," Oliveri said.
A middle-school teacher turned real estate investor, Oliveri started his career as a real estate agent in 2006 with Exit Realty, later moving to Coldwell Banker and then Re/Max. He had been at Re/Max Real Estate Limited in Oradell, N.J., for about a year when he got his broker's license in June 2010.
Before launching his brokerage that same month, he had spent a year and a half researching how to start a business based almost entirely around the Web. Key to his approach was hiring a software developer to build a custom, Web-based transaction management system, at a cost of $150,000.
Oliveri, 33, chose not to use a third-party platform. "You can't always rely on third-party programs to be around forever," he said. "At the end of the day, it's an investment for me."
Oliveri expects to recoup the cost in about three years. While the initial expenditure was more than that of a traditional, brick-and-mortar brokerage, the monthly costs are considerably less, he said. While a typical brokerage office has costs between $6,000 and $9,000, it costs him $1,675 a month to operate his office, including rent and utilities, insurance, servers and multiple listing service fees, he said.
The company's nine agents work from home. He also works at home or at a small shared office space the brokerage leases. (New Jersey requires brokers to have a main office open to the public, according to the state's Department of Banking and Insurance.) The receptionist and conference rooms, and the costs associated with them, are shared with other companies.

Mel Oliveri
Though the brokerage's agents can come in to the office to use a computer or one of the conference rooms, they rarely need to.
"We've been open since June. Maybe one agent has come in," Oliveri said.
Property Hub's platform allows the agents to add transactions and upload documents such as listing contracts, purchase contracts and paint disclosures. Agents can also track the status of their transactions.
For documents that require a client's signature, the platform saves the document and e-mails it to the client. Once the client has signed electronically, the document is e-mailed to both the agent and the client. The e-mail registers the date and time as well as the client's name and Internet Protocol (IP) address in order to make the signature legal under federal law, Oliveri said.
"If you can fill in the blanks, open a PDF, (and) send an e-mail, you can use our system. It's very user-friendly," he said. The platform is accessible from agents' smart phones, iPads and other mobile devices.
"We could literally run the business from our hip if we chose to," Oliveri said.
Property Hub's agents range in age from 24 to 56. For any agents who have trouble using the platform, the brokerage offers online training videos.
Instead of land lines, Property Hub uses a virtual phone system All phone calls go to a single number. Callers dial an agent's extension, and that call is automatically routed to the agent's mobile phone. If the agent doesn't answer, the call goes to an agent who is on "up time," the virtual equivalent of floor duty.
That way, "every phone call gets answered," Oliveri said.
For calls with international clients, the brokerage uses Skype. For meetings, it uses online meeting software FuzeMeeting.
A lot of clients love the paperless approach, he said. He showed one house to a client the day it came on the market. The client was a flight attendant who flew to China the next day and wouldn't return until the following Tuesday.
"I attended the Sunday public open house to see the activity and it was packed, so I knew the house wouldn't last. I expressed to my client -- who loved that house -- (that) 'we need to move quick' and that's when we did a (FuzeMeeting) webinar to review comps and (we) e-mailed (an) offer for e-signatures."
The process took all of 20 minutes and the house closed 45 days later.
"If we would have waited for Tuesday or Wednesday we might have missed the opportunity and someone else might have beat us to it," he said.
Carolina Betances, a part-time agent who joined Property Hub at its outset, said the brokerage's paperless approach convinced her to become an agent in addition to her responsibilities as a full-time, high-school math teacher, wife and mother of three.
"I had to really think about if I had the time to dedicate myself to this profession, but with this virtual option I know I can use the time that it saves me more wisely and close more deals," she said.
Another agent, Michael Guerriero, 34, used to work for a local brick-and-mortar Prudential real estate brokerage. Attracted by the paperless concept, he joined Property Hub in July 2010 and said he can't see himself going back to the "traditional" way of doing real estate.
"Going paperless has freed up a lot of my time. All my documents, contracts and contacts are in one centralized location for me to manage and ... access from anywhere. There is no need to drive to the office, make copies or meet clients for signatures," he said.
Most of his clients are used to electronic documents and signatures from the workplace, he said. But "if my clients aren't as tech-savvy as myself, I have the option of printing the documents and meeting them for signatures. Either way, I can conduct my business."
He points to a particular time when he was out showing homes to his clients and they wanted to write up an offer, but their infant was getting restless.
"So we parted ways and by the time they got home they had the offer in their inbox for electronic signatures and they were content they didn't have to meet me another day to sign documents," he said.
"I have saved hundreds (of dollars) in paper and ink. I usually only print 'client fliers' when I show my buyer clients homes so they have the property info. It's amazing how I can do pretty (much) everything from my fingertips."
Guerriero found the easiest thing about the platform to learn was that once a transaction is entered, the platform generates a unique e-mail address for that transaction.
"So anytime I receive a PDF from an attorney, lender, etc., all I have to do is forward that e-mail to that (unique) e-mail (address) and those documents are automatically attached to that specific transaction. I can't lose a document ever," he said.  
The only downside to being a paperless brokerage is "having to go back and do things the old way for some of the less tech-savvy agents or lenders that require actual signatures," he said.
In those cases, he sends them the paper signatures, but also a link to the federal Electronic Signatures in Global and National Commerce Act (ESIGN), which made electronic signatures legally equivalent to pen-and-ink signatures. In some cases, the link has convinced the resistant party to accept the e-signatures.
"Most (of) the agents in our area are a little older than myself, so they are a little taken (a)back from it and ask thousands of question(s). But when they realize how efficient it is, they ask what service I am using. Overall, many mortgage brokers, attorneys and lenders do not have an issue with e-signatures," Guerriero said.
Nearly all of the brokerage's marketing is done online. For e-mail marketing campaigns, Property Hub uses the software tool iContact.
"With a postcard campaign, you're looking at a half-percent return on your money. I don't think mailers and postcards work as well as e-mail campaigns, phone calls and social media," Oliveri said.
The brokerage does put yard signs in front of listed homes, but rather than a box of fliers, prospective homebuyers have the option to send a text message for property details and photos.
The text-messaging system acquires the buyer's phone number and "sets them up for a phone call from one of our agents," Oliveri said.
The brokerage's staff includes four full-time telemarketers and one person who handles the brokerage's search engine optimization.
The staff member in charge of SEO syndicates listings to social media and bookmarking sites such as Digg, Facebook, Twitter and MySpace, as well as to video sites like YouTube for better search engine ranking.
That syndication "creates links back to our website, generating leads. (The agents) don't have to do any of this," Oliveri said.
The brokerage also syndicates its listings to major real estate sites like Zillow and Trulia through Postlets and ListHub.
The four telemarketers call sellers of expired listings from the local multiple listings service and from for-sale-by-owner websites.
Because the telemarketers solicit clients for agents, they're "a great recruiting tool for us," Oliveri said.
Guerriero said the lead-generation system "thus far ... has worked out great. (I) have gotten numerous listing appointments and listings from it," he said.
None of the telemarketers live in the state of New Jersey. They work remotely from other parts of the country and have access to Property Hub's Web-based platform.
The brokerage also operates numerous blogs and websites and owns more than 1,000 domain names -- Oliveri said there are 72 towns in our county, "so we purchased all the towns in these, then we added NJ so we got Another one is and another variation This way we bought up the entire market for all 72 towns so no other broker or Realtor has them," Oliveri said.
"Then we do target marketing with these domains on Facebook and Google AdWords."
For investor-buyer leads, the brokerage owns For short-sale leads, And for leads from motivated sellers,
To prevent in-house competition, Property Hub's agents are assigned to three or four different towns of their choosing within Bergen County. When a lead comes in from a particular town, the lead goes directly to the assigned agent. Property Hub's agents have two compensation options: They pay a monthly office management fee of $495 and a sales-price-dependent transaction fee for each transaction; or, they work on a 70/30 commission split.
Oliveri plans to further expand Property Hub by buying or converting other real estate brokerages, with an eye toward franchising in the future.
"Many brick-and-mortar brokerages have been closing their doors due to too much overhead or steering away from their franchise affiliation due to ludicrous franchise fees. We are looking to convert these office(s) to our virtual and paperless model as a net branch (satellite office) or we'll buy them out," he said.
"Before spending hundreds of thousands of dollars to franchise, this is a great way to see how other brokers take to our model."
He is currently in negotiations to convert two New Jersey brokerage offices to Property Hub's model. In exchange, the brokerages will use Property Hub branding and Property Hub will get a percentage of their profits.
When Property Hub buys or converts another office, "we will not be utilizing the actual office space, but rather set up shop in (a) smaller corporate facility to minimize expenses and for a place for (the) agents to meet clients if need be," Oliveri said.
"One thing I learned in business (is) 'problem solvers make money,' and I am solving a lot of brokerages' problems by minimizing overhead and maximizing bottom line," he said.

1 comment:

  1. Whilly:

    Excellent post. You have investigated and unfolded the entire transaction life cycle in great detail.

    I am surprised by Mr. Oliveri's decision to develop an in-house solution. With cloud computing and continuous development, third party solution providers can focus on evolving to an ever changing world.

    Is there a cost benefit analysis or case study out there of brokerages going paperless? I would love to see one.