Selling Real Estate, Without All of the Paper

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Austin Allison: The process "seemed broken to me."Credit Dotloop

Real estate has always been a paper-intensive industry. Whether it is mortgage documents, appraisals, deeds or titles, the transactions produce a lot of paper and often require multiple parties — agents, mortgage brokers, buyers, sellers, appraisers, inspectors — to be in the same place at the same time for a closing.

Recently, however, the cloud-based platform Dotloop has been streamlining the process and taking the paper out of it. Dotloop is used by 3,000 real estate offices, some with as few as 10 people. It creates a virtual workspace where multiple parties can come together, reach an agreement and sign documents. It also allows an office’s manager to see and manage all current deals.

Here’s how it works: Agents who have accounts can use Dotloop from their desktop, tablet or phone. For every deal that’s in progress — known as a “loop” — the parties involved are invited to join that loop. They can review, sign and edit contracts and other documents on their own schedule, and the software notifies all parties when something is reviewed or signed.

Dotloop offers two products. Dotloop Dashboard enables an entire real estate office to run on the cloud, with everything done online, including the storage of paperwork. “Imagine taking the whole back office of file cabinets and manila folders and replacing it with a simple, web-based solution. It fundamentally changes how these offices operate,” said Austin Allison, the company’s founder and chief executive.

Businesses pay a monthly subscription fee that starts at $300 a month and can go as high as “tens of thousands” of dollars a month, Mr. Allison said. The price depends on the size of the company, the number of agents that need licenses and any integration that may be required to connect with an office’s existing systems.

There is also a Dotloop model for individual users. It’s free to create, share, store and sign the documents needed to complete a transaction. For $30 a month, users can upgrade to a premium subscription, which adds more advanced functions, including document editing and online to-do lists.

Mr. Allison has been in real estate since he was a teenager. At 17, he bought and renovated a house, turning it into a rental. By the time he was in college, he was selling real estate part time. “Fifteen minutes into my first transaction,” he said, “I saw how incredibly inefficient the process was.” Ten years later, everyone in real estate was still using fax machines, he said: “That seemed broken to me.”

Trying to fix it hasn’t been easy. “We are dealing with an industry that has worked a certain way for a long time, so our biggest challenge is change management,” Mr. Allison said. Dotloop has invested in customer service to help smooth the transition to its platform. The company, based in Cincinnati and San Francisco, has teams of employees focused on getting new customers on the system and using it successfully within 90 days.

Marianne Clark, the broker in charge of the Coldwell Banker First Reality office in Havelock, N.C., said her agency began using Dotloop in its two offices in January. “When we show a listing,” she said, “we just take our iPad with us. You can fill forms out and have the client sign right there. You can also do work at home, because you can pull the documents up on any computer. It’s like traveling with your whole office.” She added, “We’re pretty much paperless now — we’ve cut down by about 80 percent.”

About 17 million people are now using Dotloop’s network, Mr. Allison said, including about 1.2 million real estate professionals (the others are everyone else involved in transactions: buyers, sellers, title company personnel, mortgage and insurance brokers and appraisers). The company, which has about 130 employees, has raised about $10 million in venture capital and says it hit positive cash flow in 2011. Annual revenue, Mr. Allison said, is now $10 million to $15 million.

The user base has been growing a minimum of 150 percent a year, Mr. Allison said. Dotloop surveyed those users at the end of 2013 and found a majority of agents said their income had increased 20 percent or more since they began using the platform.

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Correction: July 18, 2014
An earlier version of this post misstated the availability of the Dotloop app. Though the company does not have versions for all mobile platforms, the software is available in iOS for the iPad.