After recently spending over $2,500 to shred over 3,000 real estate records older than seven years, Zoe Sawyer, vice president of associate development for RE/MAX Southeast, didn't hesitate when one of Denver's oldest and largest title insurance companies, Land Title Guarantee Company, asked her to get her 160 Realtors to "Close Green" and switch to emailed paperless transactions for commitments to insure, corresponding documents and B-2's.
DENVER After recently spending over $2,500 to shred over 3,000 real estate records older than seven years, Zoe Sawyer, vice president of associate development for RE/MAX Southeast, didn't hesitate when one of Denver's oldest and largest title insurance companies, Land Title Guarantee Company, asked her to get her 160 Realtors to "Close Green" and switch to emailed paperless transactions for commitments to insure, corresponding documents and B-2's.
"In a typical month, we receive on average 300 title commitments on the listing and buying side," Sawyer said. "The amount of paperwork is outrageous. When the initial title work with the corresponding decks of covenant is delivered, it's as big as the metro Denver yellow pages. Then, that individual hand delivered set of documents requires our telephone follow up to corroborate receipt by all parties to the transaction to ensure we have fully complied with all contractual terms. That's a time-consuming, labor intensive process and, for the most part, an unrecoverable operating expense."
According to Dex Media, publisher of the Qwest Dex Denver yellow pages, the Denver A-Z book weighs in at a hefty 6.5 pounds. In just RE/MAX Southeast's offices alone, those Realtors could generate in title commitments nearly 2,000 pounds of paperwork in one month--one ton--or nearly 12 tons of paperwork in one year.
To compensate for lost employee time, file storage costs and transaction fees, many residential real estate brokerages have resorted to charging their Realtors and agents a transaction fee that ranges from $50 to $200 per contract to mitigate those escalating costs that eat into brokerage income and revenue. In turn, Realtors either absorb these fees as an unrecoverable cost of doing business and lose fee income or pass them onto the listing or buying customer. Land Title is an innovator in servicing the Realtor community, Sawyer said. "They're the only title insurer in Colorado who has come to us saying 'we feel your pain and we're going to make it all better.'"
In the case of RE/MAX Southeast, many Realtors must pay the brokerage a desk fee of $300 per month for previously unrecoverable overhead expenses. Others, like Coldwell Banker, charge their Realtors a fixed fee of $199 per transaction. Fewer still, like Fuller Town and Country Properties, charge no transaction fee to its brokers even though it absorbs nearly $5,000 a year in storage space to accommodate four year's worth of real estate transactions, according to Heather Baker, president.
"We keep four years of transactions closed on premises as required by the Colorado Real Estate Commission, which amounts to on average 1,600 closed transactions per year for our 130 brokers, or over 6,400 documents," Baker stated. "A dozen of our brokers have participated in Land Title's introductory electronic transaction management service because they recognize that linked delivery will ensure deadlines are met, the consumer and Realtor can access the transaction at all times and lenders appreciate the efficient, paper-friendly accessibility. Our brokers are on the road, mobile and dependent on electronic technology. So, if a file needs to be accessed and it's two or three years old, it's a faster, easier and more economical process to access it on CD versus having a staff person comb through years of paper stored in boxes in a basement."
The Recycling Challenge
In sponsorship with the National Arbor Day Foundation and in cooperation with Denver's own ReThink Recycling Program (www.denvergov.org/DenverRecycles), promoted by Mayor John Hickenlooper, Land Title is giving away a free blue spruce sapling to each buyer and seller at a transaction that is either a residential resale or a builder's new home purchase if the Realtor to the buyer or the seller has elected to receive linked title commitments versus hand-delivered paper.
"We estimate we will give away 10,000 live Colorado blue spruce trees by October 2005. No mountain of paperwork is too high when it comes to streamlining the transaction process for our customers," stated Brian Hamilton, senior vice president, Land Title. "We now can provide 24 hour access to all linked documents online including 24-month chain of title, tax certificates, vesting deeds, B-2 exceptions and plat maps. We're providing immediate delivery of all pertinent documents as soon as they're available to eliminate any delays from couriers or overnight delivery. Our exclusive new TMX system enables our clients to access and manage every aspect of their transaction online so they benefit from streamlined communication, ease of ordering, convenient information retrieval and access to live updates. We're changing the face of the Old Gray Lady of the title industry by giving her a technological facelift to reflect the tech-savvy homebuyer demographics."
What Paper Tonnage Means to Coloradoans
The largest order of whales known is the blue whale, which attains a maximum length of 100 feet and a standard weight of 140 tons. Its tongue weighs more than the heaviest recorded elephant and its heart weighs as much as the size of a Volkswagen Beetle vehicle.
If all of the 42,212 licensed brokers in the state of Colorado at the end of 2004, according to the Colorado Real Estate Commission, engaged in just one real estate transaction that generated a first round of just 6.5 pounds of paper, then over 274,000 pounds, or over 137 simple tons, of paper would be generated in one year--the equivalent of one blue whale.
Colorado lags dramatically behind the rest of the country in paper recycling where only 3 to 10 percent of paper waste is recovered for recycling, according to the Colorado Association for Recycling. One possible reason: dumping in landfills is dirt cheap in Colorado; disposal fees are $10 to $20 per ton, as opposed to fees of up to $100 per ton in other areas of the US.
Each person in the United States uses approximately 749 pounds of paper per year, according to the Education in Nature Website of Georgia Pacific. Due in large part to municipal encouragement across the US, paper recovery now stands at 339 pounds for each man, woman and child, according to the American Forest and Paper Association.
With more than 70 percent of homebuyers starting their home search online, according to the National Association of Realtors (NAR), moving from paper files to paperless makes the entire transaction process environmental, economical and streamlined, Hamilton noted. "Buyers search for homes online, obtain competing mortgage rates online and apply for those mortgages online. But when they sign a contract on a home, everything has traditionally gone back to a time-consuming paper world where we've been building more blue whales. But, if we can convert just 10,000 closings a year to paperless at Land Title, we can save at least 35 tons of paper in our Denver offices alone and make every online closing faster, less expensive and more efficient."
About Land Title Guarantee Company: Land Title Guarantee Company is one of the oldest title insurance companies in Colorado currently in its 38th year of business with over 800 employees in over 50 locations throughout Colorado and Arizona. Additional company information is located at http://www.LTGC.com.
Source: Business Wire, Land Title Guarantee Company