With the ever-evolving landscape of technology and business practices, new terms are emerging to help us describe the future of real estate transactions. One, in particular, is the “Connected Transaction.”
The Connected Transaction is a real estate closing that can be structured, automated, and delivered end-to-end by the various closing parties working together as one. This transaction experience means that not only are title & escrow workflows automated, but their closing partners’ dependent workflows can be as well. This setup improves the homebuying experience for the end consumer at scale by enabling a simple, secure, and enjoyable real estate closing.
In this post, we define and explain new terms related to the Connected Transaction that are especially important when designing effective workflows and conducting closings. These terms will help title agencies navigate modern real estate transactions as well as identify new opportunities for operational efficiency and partner collaboration.
1. Automation
The current understanding of “automation” in title & escrow workflows is outdated and generally refers to fields that are auto-populated or manually accepted instead of typed out. What automation should refer to in the modern era is the ability for the system to use either input from a human (e.g. the completion of a task) or data from an outside source, collected as structured data, as a trigger to assist in the performance of an activity. Some major benefits of using automation in workflows include faster closings, increased accuracy, and fewer closing delays. With the time savings gained by reducing manual tasks with automation, title agents can dedicate more time to delivering personalized communication to clients and addressing edge cases during transactions.
2. Standardization
In workflow design, standardization is the process of deciding which system features support critical closing processes and then using those features consistently across workflows. For example, title production software may have multiple ways to set up task assignment triggers: 1) after a certain task is completed (“Previous Task”) or 2) when a user is assigned a specific task (“Specific Task”).
While both ways allow title agencies to trigger tasks in essentially the same way, using them interchangeably may lead to confusion and unnecessary complexity in workflows. Instead, title agencies should pick one method to build all their workflows as similarly as possible. Building workflows with standardization in mind makes workflows easier to service, understand, and build upon later. Standardization also results in consistency—an often overlooked principle that enables businesses to build trust and create predictable experiences that other closing parties will value.
3. Structured data
Structured data refers to information that is organized in a way that is easily readable by software. Structured data can power automation in a title agency’s operations by reducing manual work and improving connectivity across closing parties. For example, say a title agency receives property documents electronically in a structured format. The agency can develop automated systems that extract relevant information from these documents—such as property details or ownership records—and immediately populate them in their database or management software.
Additionally, with structured data, title agencies can set up automated workflows to trigger specific actions (such as generating title reports or sending notifications to relevant parties) based on pre-defined criteria. This automation not only improves efficiency but also ensures consistency and accuracy in processing title-related tasks by eliminating the need for manual data entry.
4. Base workflows
Base workflows are the first “base” layer of building a modular workflow. They consist of tasks that are the same, no matter who the transaction parties are or where the property is located. For example, a base workflow may include common tasks such as opening an order, ordering title, producing a commitment, etc. These tasks provide consistent data points for reporting and act as triggers to bring in tasks required to add complexity to the workflow.
One benefit of designing workflows this way is that employees don’t have to navigate complex workflows with elaborate decision trees during closings. Not only does this help employees move through closing tasks faster, but it also makes it easier to train employees on new processes.
5. Workflow debt
Workflow debt is the hidden cost that results from a complex and unmanageable schema of tasks, workflows, and automations. It primarily appears in workflows with high levels of complexity and customization.
Many title agencies build complex workflows to address every possible transaction their teams may encounter. While this strategy can help title agencies accomplish their operational goals in the short term, it can also lead to workflow debt because it’s challenging for businesses to evolve their workflows over time. As a result, workflow debt has historically kept title agencies from expanding into new regions and evolving to meet changing client needs.
6. Workflow downtime
Workflow downtime (also referred to as third-party wait time) is the time each closing party spends waiting for information from another party. This downtime also includes the time needed to input, parse, and validate information before it can be used to progress a closing forward.
For example, a title agent may need to receive information or documentation from a lender before they can complete their work on a file. The title agent may need to call or email the lender multiple times before they receive the necessary information. Workflow downtime is the time spent waiting for this information and then manually adding it to a file. This downtime can result in significant delays across files and lengthen the time to close.
7. Bi-directional data exchange
Bi-directional data exchange is real-time, two-way data access between parties. In real estate transactions, secure bi-directional data exchange enables title agencies, lenders, real estate agents, and underwriters to share information about a transaction immediately without needing to manually send reminders or requests for data. This eliminates workflow downtime in a closing, which allows closing parties to truly automate the closing process, delivering a faster, more transparent experience.
8. Information silos
Information silos occur when systems cannot communicate efficiently with other systems—such as when using static data to share updates. Information silos can lead to redundancy, confusion, and inaccuracies when sharing information about a transaction, making it difficult to create a seamless closing experience. These obstacles ultimately lead to poor collaboration no matter how much manual effort is made.
9. Dynamic updates
Dynamic updates are the modifications made on a file based on new data that is “discovered” when working on an order rather than through a static or pre-defined configuration. For example, dynamic updates can occur when a processor inputs new information or another closing party sends an update.
10. Dynamic workflows
Dynamic workflows are workflows that automatically update as new information enters a system. With dynamic workflows, new task groups are created immediately after new information is received from a closing party or input by a processor.
Dynamic workflows are often the result of three pieces of the workflow design puzzle—automation, standardization, and structured data—coming together. The outcome is a domino-like effect where multiple tasks are completed simultaneously, which, in turn, simplifies workflows, saves time, and reduces manual effort. Lastly, dynamic workflows can help title agencies reduce the total number of workflows needed to execute closings, which can help minimize workflow debt (defined above).
Interested in learning more about powering a new level of collaboration during transactions? Click below for more on Qualia Atlas’s new level of enterprise team and partner collaboration benefits.
