A few weeks ago a client, in the middle of a conversation regarding real estate investments in Miami, asked me “What’s a closing table?” For real estate professionals, a closing table is like the goal line on a football field; the place sellers, buyers, agents, banks and attorneys meet to score the deal.
But today, the goal line is often virtual instead of physical. Most people in the U.S. are renting instead of buying because it is hard a find a mortgage, so they haven’t experienced the closing process. But when a very active real estate investor from Latin America who bought three properties asked the question, it caught my attention. After I explained the concept, he asked why he had never been to a closing table.
Years ago, buyers and sellers would meet at the property to inspect it before closing. Then the buyer present a cashier’s check and bring it to the closing table, where he would meet the seller and the representative from the title company (usually the attorney), and they would all sign the closing statement and seller documents.
Today title companies highly recommend wire transfers over cashier checks. Actually, some of them do not accept cashier checks at all to prevent fraud. For international markets such as Miami, buyers and sellers are often located in different cities. So it is common to conduct mail away closings where seller documents are sent to the seller, who gets them notarized in his location. The same process takes place with the buyer. They are basically signing the closing documents in counterparts. About 95% of our closings this year have been mail away closings.
Technology has changed the world and the real estate business must evolve. If the closing table disappears, what’s next? Is it the real estate agent? Is it the title company? Personally, I don’t think any of these two entities are disappearing in the short term. But there is one change slowly taking place in the real estate business. Buyers and sellers are relying more and more on the Internet to conduct their own research, sometimes before even contacting a real estate agent. Most of them actually contact a real estate agent after they have conducted their own research online.
Therefore, the agents who empower real estate consumers with the tools to conduct their own research online will be the ones better positioned to retain consumers. This is very similar to what happened with the travel industry and the car industry.
When was the last time you bought an airline ticket at a travel agency? When was the last time you bought a car without doing research online first? Granted, real estate purchasing is more complex than buying an airline ticket or a car, but most real estate investors around the world know how to navigate the web. Real estate agents and professionals stuck at the table may want to improve their online presence to open up new opportunities and stay in the game