Gotsta get paid - How agents pay transaction managers
- Ali Spicer
- Jul 26, 2018
- 3 min read
Note: Transaction manager, transaction coordinator, TC all used interchangeably
There tend to be two main types of agents that are unsure about how the payment process between agents and transaction managers takes place: agents that have always have a TC provided to them by a team leader and are now independent, and/or agents that have never had one. Here’s the quick rundown on how it works.
Of course, some TCs are employees, and we all know how that works. This quick post will cover how independent contractors are paid. Also note: each independent contractor is their own business owner, free to collect payment however they’d like. Below is how Fine Point manages the payment portion, but it isn’t necessarily how every TC will operate.
Payment Through Escrow
Step 1: You should agree on fees up front, before you bring your transaction manager into your file. You should be very clear on the cost per transaction, what’s included, and if there are any potential additional fees, like ala carte services or cancellation fees.
Step 2: Once your transaction manger begins working on your file they will be in contact with your escrow officer at the title company. A some point during the transaction, likely not less than a week before closing, your transaction manager will send their invoice to title.
Step 3: The transaction manager will send their invoice with instructions for how the fee is to be paid. Options are paid by buyer/seller, or payable out of the agent commission. They will also clarify who is to be paid; who the check will be payable to (a company? an individual? Etc.).
Step 4: Your brokerage company will likely need to know about this fee so they can generate the DA (disbursement authorization) correctly. I suggest giving the responsibility for making sure your brokerage knows about the fee to your transaction manager.
Step 5: Upon closing, the title company will disburse funds according to the DA received from the brokerage. This means that if the transaction management fee was $1,000,000😏, the title company will take that amount from the closing proceeds (either the agent commission, or as a fee from a buyer or seller) and write a check to the transaction management company or individual.
Step 6: The transaction manager will make arrangements with the title company on what to do with their funds. The agent—YOU—don’t have to do a single thing to make sure the transaction manager is paid! Awesome, no?!
Payment Outside Escrow
This will be specific to each business. Some will only take cash and checks. Others, like Fine Point, will accept cash and checks, but will also take credit cards. If Fine Point needs to invoice an agent outside escrow, the agent is billed directly to their main email address and able to pay securely online.
Why might you need to pay your transaction manager outside escrow?
The most common reason would be a cancellation fee, or any other cost that was accrued on a transaction that didn’t make it to closing. Another common reason is Listing Management. Your transaction manager may require payment for Listing Management Services when the listing goes live, which is quite common.
I hope that helps shed some light for anyone that is considering adding a transaction manager to their business plan but isn’t comfortable with all the unknowns! Do you have any other questions that you’d like clarified? Shoot me a message, and I’ll respond directly to you, or create another blog post if the question is one I hear a lot.
Happy Thursday, go make magic happen this weekend!
Fine Point Transaction Management LLC is an Idaho-based real estate transaction management company. Our mission is to elevate the Idaho Real Estate Industry by elevating Idaho Real Estate Agents. We exist to support agents who desire to build and grow strong businesses through time-leverage.
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