How unnecessary paperwork, transaction coordinators, and an industry resistant to change are making buying and selling a home more complicated, expensive, and potentially less secure than it needs to be.
By Rob Luecke, Founder of ShopProp Realty
I've been in the real estate business since 2007, and over those years, I've watched something happen that should concern every homebuyer and seller in America.
The real estate industry has taken something designed to protect consumers—property disclosures—and turned it into a mountain of paperwork that often does the exact opposite.
In California, and increasingly in other states, disclosure packages have become enormous.
What might once have been a relatively straightforward collection of property-specific disclosures can now involve 60, 100, or even hundreds of pages of documents, reports, advisories, acknowledgments, and warnings.
And in many cases, nobody seems to be asking the most important question:
Does this document actually help the buyer understand the property they are purchasing?
Because that's what disclosures are supposed to do.
Unfortunately, that simple purpose seems to have been lost.
The Transaction Coordinator Problem
Let me start with something that recently happened in one of our transactions.
A transaction coordinator asked us to have our clients initial inspection reports that our clients had ordered, paid for, and provided to the seller.
Think about that for a moment.
Our clients hired the inspector.
Our clients paid for the inspection.
Our clients received the report.
Our clients then provided the report to the seller.
And now somebody wanted our clients to initial the report to acknowledge receiving it?
They were the people who provided it in the first place!
In what world does that make sense?
Yet this is precisely the sort of thing we encounter regularly.
For readers unfamiliar with the real estate industry, a transaction coordinator, often called a TC, is someone who helps manage the paperwork, documentation, deadlines, and administrative processes involved in a real estate transaction.
Many transaction coordinators are independent contractors working for multiple real estate agents or brokerages simultaneously. Others are employees of a brokerage. Some hold real estate licenses; many do not.
California does not issue a separate transaction coordinator license. Unlicensed coordinators can perform permitted administrative functions, but activities requiring a real estate license must be performed by properly licensed professionals.
There is nothing inherently wrong with using a transaction coordinator. Good coordinators can be extremely valuable.
But here's the problem.
Many are trained to follow a checklist, collect documents, obtain signatures, and make sure the brokerage's file is complete.
They are not necessarily trained to understand the legal purpose of every document they request.
And there is a tremendous difference between knowing how to collect paperwork and knowing why that paperwork is necessary.
When someone is rewarded for making sure every possible document has been signed or initialed, the natural tendency is to request more signatures, not fewer.
Did the buyer sign this?
Did the seller initial that?
Does every page have an acknowledgment?
Should we send it again just to be safe?
Too often, nobody stops to ask whether any of it is actually required.
The result is paperwork for the sake of paperwork.
The Hidden Cybersecurity Problem: Every Additional Party Expands the Blast Radius
There is another problem with this arrangement that I believe deserves far more attention.
Cybersecurity.
Consumers are increasingly concerned about the security of their personal information, and for good reason.
When someone buys or sells a home, they may share financial records, identification documents, addresses, signatures, banking information, and other sensitive personal details.
These transactions often involve hundreds of thousands or millions of dollars.
And they're especially attractive targets for criminals attempting wire fraud, identity theft, email spoofing, and business email compromise.
At ShopProp, we take these concerns seriously.
For example, when clients provide financial documents, we ask them to redact account numbers and other sensitive information that isn't necessary for our work.
We want to minimize the personal information we collect and retain in the first place.
Because one of the best ways to protect consumer information is to avoid collecting information you don't actually need.
But now consider what happens when third-party transaction coordinators enter the picture.
Imagine a real estate brokerage that has invested significant resources into securing its systems.
It controls its company email accounts, software platforms, employee permissions, document storage, and security practices.
Then it hires an independent transaction coordinator who works with 20 or 30 other brokers.
Suddenly, the consumer's information may be passing through another organization's email accounts, devices, document storage systems, and software tools.
What security procedures does that coordinator follow?
Does the coordinator use multifactor authentication?
Are documents stored securely?
Who else has access to them?
Are the coordinator's computers properly maintained and protected?
Does the coordinator use separate accounts or shared systems for different brokerages?
What happens if one account is compromised?
And who is responsible for notifying the affected consumers?
These are legitimate questions.
The brokerage may know exactly how its own systems are secured.
But does it know how every independent contractor handling its clients' information is protecting that data?
The answer cannot simply be that the transaction coordinator has always done it this way.
One compromised account could affect multiple brokerages
This is what cybersecurity professionals mean when they discuss a system's potential blast radius.
The blast radius is the extent of the damage that a security incident could cause.
A breach involving a single employee or system within one brokerage can be serious enough.
But consider an independent transaction coordinator who handles paperwork for dozens of different real estate agents and brokerages.
If that coordinator's email account or computer is compromised, information involving multiple companies and their clients could potentially be exposed.
Depending on how the coordinator manages access, a single compromised account might provide criminals with information about numerous active real estate transactions.
And real estate transactions are particularly dangerous in this regard.
Criminals don't necessarily need to steal someone's entire identity to cause enormous financial damage.
Sometimes all they need is access to an ongoing email conversation.
They can learn who the buyer is, who the escrow company is, when closing is scheduled, and approximately how much money is being transferred.
They may then attempt to impersonate a legitimate participant and send fraudulent wire instructions.
A consumer who believes they're communicating with their escrow officer or real estate professional could be tricked into sending hundreds of thousands of dollars to a criminal.
Now multiply that exposure across multiple brokerages and their active transactions.
One compromised third-party account could potentially affect consumers who have never even heard of one another's real estate companies.
That's a significant risk.
And it raises an obvious question:
Why are we continually adding more people, more email accounts, more platforms, and more opportunities for sensitive information to be exposed?
More people does not automatically mean better service
I'm not suggesting that independent transaction coordinators are inherently insecure.
Some may have better cybersecurity practices than the brokerages they serve.
And large brokerages can have significant security vulnerabilities of their own.
The issue is not whether a particular coordinator is trustworthy.
The issue is that each additional person, system, and organization involved in handling consumer information introduces another potential security dependency.
A brokerage cannot simply assume that its own security procedures protect information after that information has been transmitted to outside parties.
That is especially concerning when the added complexity provides little corresponding benefit to the consumer.
We've created a system in which a buyer might have to sign an unnecessary acknowledgment of an inspection report—and that very request could involve another email, another attachment, another electronic signature invitation, and another outside service provider.
We're creating more paperwork while potentially creating more opportunities for fraud.
How exactly is that better for the consumer?
The Bigger Problem: Agents Have Outsourced Their Understanding of the Transaction
What concerns me even more is what all of this says about the real estate industry.
In many transactions, the person managing the documentation is no longer the licensed real estate agent.
It's a transaction coordinator.
And too often, the agent simply follows whatever the coordinator says needs to be done.
Instead of understanding the contract, statutory disclosures, and what is actually required, the agent relies on a third party to tell everyone what needs to be signed.
Now, consider how strange this is.
Real estate agents routinely justify their commissions by pointing to the complexity of real estate transactions.
They tell consumers that buying or selling a home is complicated, that there are enormous legal risks, and that professional representation is necessary to navigate the process.
Yet many of those same agents have delegated much of the transaction paperwork to someone else.
Sometimes that person isn't even licensed as a real estate agent.
And in some cases, the coordinator understands the administrative documentation process better than the agent who is supposedly responsible for it.
If an agent cannot explain why a document must be signed, why should the consumer be required to sign it?
A brokerage's desire to have a complete file is not the same thing as a legal requirement.
And an internal checklist should never be confused with the law.
Disneyland Is Apparently a Disclosure Issue for Homes in Southern California
Here's another example that illustrates just how absurd this has become.
We recently handled transactions in Irvine and San Clemente, California.
For anyone unfamiliar with Southern California, these cities are roughly 30 minutes to an hour from Disneyland, depending on traffic.
And yet we were asked to include a disclosure concerning Disneyland.
Disneyland!
What exactly is that supposed to tell a buyer about the condition of the home?
Is the roof leaking?
Does the foundation have a problem?
Has the property experienced flooding?
Are there unpermitted additions?
Is the sewer line damaged?
Those are the kinds of things a buyer needs to understand.
I understand that legitimate local conditions, including noise and environmental impacts, can affect a property. Where those impacts actually apply, they should absolutely be disclosed.
But requiring buyers to review broad, generic advisories without establishing their relevance to the particular property is something entirely different.
Are we now supposed to provide a disclosure about every amusement park, airport, stadium, industrial facility, train track, freeway, or other potential issue within driving distance?
Where does it end?
The answer, apparently, is that it doesn't.
And that's part of the problem.
The More Paperwork You Give Buyers, the Less They May Actually Understand
This is the most important issue.
Disclosure laws exist for good reasons.
Buyers should know what they're purchasing.
They should know about material defects, known hazards, legal restrictions, significant repairs, and other information that could affect the property's value or desirability.
I strongly support those requirements.
But there is a point where additional paperwork stops improving disclosure and starts undermining it.
Imagine you're buying a $1.5 million home.
You receive a disclosure package containing 150 pages.
Buried somewhere inside are three sentences telling you that the property's deck has serious structural deterioration, the sewer line may need replacement, and part of the home was constructed without permits.
Those are enormously important facts.
But surrounding those statements are dozens of pages of generic advisories about subjects that may have little or no connection to the home.
Now imagine receiving that package on your phone, being asked to review and sign everything electronically, and trying to understand what actually matters.
Do we really believe this is the best way to protect a consumer making one of the largest financial decisions of their life?
A 150-page disclosure package can make a buyer less informed than a clear, well-organized 15-page package.
Not because the buyer lacks intelligence.
Because we are overwhelming them with information that competes for their attention.
When everything is presented as important, nothing stands out.
That is not effective disclosure.
That is information overload.
And information overload is particularly dangerous in real estate, where the consequences of overlooking one material issue can cost a buyer tens or hundreds of thousands of dollars.
What's Required by Law and What's Required by a Brokerage Are Two Very Different Things
One of the biggest misconceptions in real estate is that everything in a disclosure package is legally required.
It isn't.
California has legitimate statutory disclosure requirements, including the Transfer Disclosure Statement, Natural Hazard Disclosure Statement, and other disclosures that apply depending on the property and transaction.
There can also be important local requirements.
Those should absolutely be followed.
But disclosure packages frequently include additional brokerage advisories, local association documents, administrative acknowledgments, general warnings, and other forms that are not independently mandated in every transaction.
Some may serve legitimate purposes. Others appear to exist primarily because someone added them to a checklist years ago and nobody ever questioned whether they were necessary.
The problem grows when a brokerage starts treating all of these documents as if they carry the same legal significance.
A document required by California law is not the same as a document created by a brokerage's legal department.
An inspection report is not the same as a statutory seller disclosure.
A buyer's acknowledgment that they received a document is not the same as their acceptance of the property's condition.
And signing a report does not necessarily mean the buyer agrees with its findings or waives any rights.
These distinctions matter.
Yet they routinely get blurred together in the paperwork process.
Why Does the Industry Keep Making Things More Complicated?
Here's where I believe the problem becomes bigger than paperwork.
The traditional real estate industry benefits financially from the perception that real estate transactions are too complicated for consumers to navigate without expensive professional representation.
Think about the business model.
Consumers are routinely asked to pay substantial commissions to real estate agents.
One of the primary justifications for those commissions is that real estate transactions are complicated.
Agents tell buyers and sellers that there is too much paperwork, too much liability, and too many things that could go wrong to handle the process themselves.
And then what happens?
The industry keeps adding more paperwork.
More disclosures.
More acknowledgments.
More signatures.
More forms.
More administrative steps.
Each additional step becomes another reason to tell the consumer that professional representation is indispensable.
Now, I'm not suggesting that every real estate agent or brokerage deliberately creates unnecessary paperwork to justify commissions.
I don't believe that.
Many agents genuinely think they're protecting their clients.
Some brokerages add documents because their attorneys recommend them.
Others do it because they fear lawsuits.
And transaction coordinators often request signatures because their employers require them.
But regardless of individual intentions, the collective result is the same.
An unnecessarily complicated system helps preserve the perception that real estate must be complicated.
And that perception benefits the traditional brokerage model.
Lawyers, Brokerages, and Transaction Coordinators Have Created a Feedback Loop
Consider how these disclosure packages expand.
A brokerage attorney decides another advisory might reduce legal exposure.
The brokerage adds the advisory to its required transaction checklist.
The transaction coordinator starts requesting it in every transaction.
The agents become accustomed to seeing it.
Another brokerage sees the document and decides it should have something similar.
Eventually, everybody starts assuming the document is required.
Nobody remembers why it was introduced.
Nobody asks whether it actually helps the consumer.
And nobody wants to be the first to remove it.
Then the cycle repeats.
More documents produce more administrative work.
More administrative work produces more transaction coordination.
More coordination creates more checklists.
And those checklists produce more documents.
It's a system that keeps feeding itself.
But there is another consequence.
The more complicated the process becomes, the harder it is for new companies to simplify or automate it.
How Do You Automate an Industry That Doesn't Want to Be Automated?
I've written previously about one of the biggest challenges facing companies trying to modernize real estate:
How do you automate an industry when many of its established participants have little incentive to embrace automation?
At ShopProp, we've spent years trying to make buying and selling a home easier, faster, less expensive, and more transparent.
Our objective is straightforward.
We want to eliminate unnecessary costs and friction while preserving the professional services consumers actually need.
Technology should make that possible.
A seller should be able to provide the necessary property information through a simple digital process.
A buyer should be able to understand the material facts about a home without digging through dozens of unrelated documents.
Required disclosures should be generated automatically based on the property's location, age, type, and other relevant characteristics.
The system should identify missing information, track acknowledgments, and maintain an organized record.
And qualified real estate professionals should be available when something genuinely requires professional judgment.
But there's another important benefit to this approach.
A well-designed digital transaction platform can improve security by reducing unnecessary sharing of sensitive information.
Instead of sending documents back and forth among agents, independent coordinators, escrow officers, and other third parties through numerous email accounts, information can be maintained in one secure system with appropriate access permissions.
People involved in the transaction can receive access to the specific information they need, when they need it.
Activity can be recorded.
Access can be revoked.
Sensitive data can be minimized.
And participants can be verified rather than relying entirely on email conversations that might be spoofed or compromised.
Of course, no system is perfectly secure. Centralizing information also creates responsibilities for protecting that central system.
But designing security into the transaction from the beginning is far better than continually adding outside parties and hoping everybody is following appropriate procedures.
None of this is particularly difficult to envision.
But implementing it inside the existing industry is another matter.
When every brokerage has its own disclosure package, every transaction coordinator has a different checklist, and every agent insists on another signature, standardization becomes enormously difficult.
We aren't just trying to automate a process.
We're trying to automate a process that keeps getting more complicated for reasons that often have little to do with protecting consumers.
Washington Demonstrates That Real Estate Disclosures Can Be Simpler
ShopProp has operated in Washington since 2007, and the difference between Washington and California is striking.
Washington uses a statutory seller disclosure form, commonly known as Form 17, that focuses on the property's condition and other relevant matters.
Washington's residential purchase-and-sale transactions can also use relatively concise agreements and targeted addenda.
California transactions, by comparison, can involve substantially larger collections of statutory disclosures, advisories, reports, and brokerage-generated documents.
Of course, different states have different legal requirements, and Washington transactions can also involve extensive documentation when circumstances warrant it.
The point isn't that Washington is perfect or that California should eliminate necessary consumer protections.
The point is that effective disclosure does not require drowning consumers in paperwork.
If a property has a serious foundation problem, disclose it.
If a deck is unsafe, disclose it.
If there's been water intrusion, disclose it.
If the home has unpermitted construction, disclose it.
If a location-specific hazard genuinely affects the property, disclose it.
But let's stop confusing the quantity of documents with the quality of disclosure.
What Real Estate Disclosures Should Look Like
I believe we should completely rethink how disclosure information is presented to buyers.
Imagine opening a property's disclosure package and seeing a simple, organized summary.
Property-specific conditions: Known defects, repair history, structural issues, moisture problems, plumbing and electrical concerns, and other relevant information supplied by the seller or documented in reports.
Legal and regulatory matters: Permits, zoning, title-related issues, local compliance requirements, rental restrictions, and other matters that actually apply to the property.
Natural and environmental hazards: The specific flood, fire, earthquake, environmental, or other applicable hazards identified by available sources.
Inspection reports: A clearly organized collection of the actual reports, with the findings and recommendations easy to locate.
Required legal disclosures: Every disclosure required by federal, state, and local law, presented clearly and available in its complete form.
Security and privacy: A transparent explanation of who can access the buyer's information, why they need it, and how that access is protected.
All material information should remain available. Nothing important should be hidden or omitted merely to make the package shorter.
But the buyer shouldn't have to read 100 pages of largely generic material before discovering that the property has a dangerous stairwell or a failing sewer line.
We should use technology and artificial intelligence to help organize, summarize, and highlight material findings while preserving the underlying documents for full review.
A buyer should immediately understand what has been reported, what remains uncertain, and which issues warrant further investigation.
That would be a meaningful improvement in consumer protection.
Real Estate Should Be Getting Simpler, Not More Complicated
Almost every major industry has been transformed by technology.
Consumers can buy stocks, manage investments, obtain insurance quotes, transfer money, and complete complex financial transactions online.
Technology has made many of these processes faster, cheaper, and more accessible.
Yet in real estate, we're still asking people to initial inspection reports they ordered themselves.
We're still sending generic disclosures with questionable relevance to the property.
We're still relying on inconsistent administrative checklists.
We're still forwarding sensitive documents through multiple organizations and email systems without consumers necessarily knowing who has access to their information.
And we're still asking consumers to pay substantial commissions to navigate a system that the industry itself has made unnecessarily complicated.
Something is wrong with that picture.
At ShopProp, we believe the future of real estate should be built around the consumer, not around preserving the traditional industry's processes.
That means fewer unnecessary steps.
Clearer disclosures.
Better technology.
Stronger privacy and security.
More automation.
Real transparency.
And dramatically lower costs.
Real estate transactions will always involve important financial, legal, and practical considerations. Consumers should have access to licensed professionals when they need them.
But complexity should never be manufactured, exaggerated, or preserved simply because the existing system has grown accustomed to it.
The purpose of disclosures is to inform the buyer, not to overwhelm the buyer.
The purpose of collecting personal information is to complete the transaction, not to distribute it unnecessarily across an expanding network of third parties.
And the purpose of a real estate professional should be to make the transaction easier, not to justify their existence by making it harder.
After nearly two decades of working to change this industry, I believe those distinctions matter more than ever.
It's time we stopped measuring consumer protection by the number of pages somebody signs.
And started measuring it by how well consumers understand the homes they're buying—and how safely their information is handled throughout the transaction.
Real Estate, Flipped.
Rob Luecke is the founder of ShopProp Realty, a technology-driven real estate brokerage focused on reducing commissions, simplifying transactions, and giving consumers greater control over buying and selling homes.
Sources and Further Reading
- California Department of Real Estate — Unlicensed Administrative Assistants
- California Department of Real Estate — Salesperson License Requirements
- California Department of Real Estate — Reference Book, Chapter 20: Real Estate Disclosures
- Washington State Legislature — RCW 64.06.020, seller disclosure statement (version effective through December 31, 2026)
- FBI Internet Crime Complaint Center — Business E-mail Compromise, including Real Estate Sector Targets (July 12, 2018)
- National Institute of Standards and Technology — Privacy Framework 1.0, data minimization and third-party ecosystems (January 16, 2020)
- Rob Luecke — How Do You Automate Real Estate When the Biggest Players Fight Automation to Protect Their Commissions?
