It’s no secret that almost any transaction involving real estate requires a lot of paperwork. That could be for lease applications, lease agreements, or even when you’re preparing purchase agreements.
All this paperwork tends to take hours and is often filled with errors on the first go around. Because of this, real estate document automation can be a powerful way to improve the speed at which documents are created. Of course, that’s not the only benefit.
In this guide, you’ll learn what real estate document automation is, its benefits, and how to get started with it.
What is real estate document automation?
Real estate document automation is, in many ways, similar to core document automation. It can be defined as the process of using technology, usually software, to collect data related to document drafting, creating documents, and disseminating those documents for real estate transactions.
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The major difference between other types of document automation is that it’s laser-focused on real estate transactions. These can be wide and varied and include things like
Really, if it’s related to real estate, has variable data, and is a type of document that’s created often then real estate document automation is a viable approach.
Why should you automate real estate documents?
Without touching on the many benefits of real estate document automation, one of the core reasons to automate real estate documents is to prevent data entry errors.
Even a small mistake in entering data can lead to major problems. For example, if an address is entered incorrectly on a deed, it may cost a considerable amount of money to get it fixed or to prove it was a mistake in court.
The challenge is that data entry issues are more common than many people think and they can take many forms.
When we think about data entry, we usually think about the wrong information being entered. That’s just scratching the surface. Other types of data entry issues include:
- Improper formatting (using numbers instead of words)
- Accidentally repeating data that has already been entered
- When numbers and letters are swapped or multiple numbers are swapped which is called a transposition error
- Inconsistencies in the format of the data entered (such as writing out a date in one place and then using figures in another place)
- Interpreting the data incorrectly and entering it (for example, thinking the letter O is the number 0).
In a study by Zapier, it was found that knowledge workers spend 1 – 3 hours a day moving data around and another 1 – 3 hours a day looking for data and documents. Additionally, they spend another 1 – 3 hours fixing mistakes colleagues made in data entry.
Document automation allows those working in real estate organizations to take a step back and reduce the time required for data entry and slash the prevalence of errors.
Benefits of real estate document automation
The following benefits aren’t exhaustive but they’ll help you better understand what real estate document automation can and cannot do for you.
- Faster document preparation and signing
On average, you can expect to see a 90% reduction in the time it takes to create documents and contracts you work with regularly. For example, if you create multiple lease agreements a week, and each one takes a few hours to get done, that should be reduced to just a few minutes with document automation.
Additionally, you’ll be able to sign the document using the same platform. For example, UsefulPDF also has an electronic signature product called UsefulSign so as soon as the document is created, it can be signed in the next moment. This seamless approach further slashes the time it would take you to create and sign documents.
- Streamlined workflows
A benefit many organizations achieve but don’t initially realize they’ll get is the optimization of document workflows. Usually, people have a loosely defined process for managing documents. Someone needs to make it, someone needs to get it signed, and someone else needs to check the clauses and approve.
With document automation, you’re required to define your processes. If you don’t know how the workflow goes, how can you expect to set up the software the right way?
You’ll end up stripping out unnecessary steps and getting to the core of the required process. It’s easier for you, the end user, and the signatories.
- Better client experience
Filling out a questionnaire, reviewing the document, and then getting it signed in near real-time is a pleasant experience for clients. It shows them you’re adopting technology to make their lives easier and your processes are fast.
They’re more likely to think you’re competent (which I’m sure you are) in your area of expertise and other areas. This phenomenon is known as the halo effect.
How to get started with real estate document automation
Real estate document automation may not be easy in all cases but it is straightforward. Follow the steps below to get a head start.
- Identify the documents to be automated
Unfortunately, you cannot automate all of your documents at once. In some cases, certain documents aren’t even a good fit for automation.
It’s important to identify the documents that need to be automated beforehand based on the positive impact they can have.
For example, if it’s a document that someone needs to create every day and takes 2 – 3 hours to draft, it may be a perfect candidate for automation. If, on the other hand, you use it once every few months, it may not be a good fit.
- Get relevant stakeholders on board
This is important in larger organizations where different people wield authority. Who will be positively impacted and who could be negatively impacted by the document automation initiative?
Identify both groups and develop a plan of action so that they’re either on board or aren’t openly antagonistic to what you’re trying to accomplish. They’ll also be helpful in the next step.
- Audit current processes
How are you currently creating your mission-critical documents? What are the steps? Do you have standardized clauses across the board or are they all saying the same thing but with slightly different language? Who’s involved in the creation and signing process?
These are things that need to be taken into consideration when you’re auditing your current document workflows. The goal is to make sure that you have a standard and repeatable process.
The stakeholders you identified will help you get a clearer view of the internal processes already in use and will make updating those document processes much easier.
- Create dynamic document templates
This is where things get fun. After you’ve identified documents, audited current workflows, and standardized the processes that need it, you’ll make your dynamic document templates.
There are a few things to consider:
- The clauses that you’ll use. These should be approved and standardized because every document created with the template will have those clauses
- The necessary conditional logic. If someone answers a question in a certain way, how does the document evolve to fit that situation? For example, if you have a master template for NDA agreements, if someone selects mutual NDA, how will the document change? If someone selects unilateral NDA, what happens?
- The variable data you’ll add. These are the tags or anchors that will change based on how the interview questionnaire is answered. It’s best to have naming conventions so that if you want to generate multiple documents from a single form, people won’t have to answer the same type of question more than once.
- Post submission actions or delivery options. What happens after the document is created based on the interview questionnaire? Does someone get notified, is it sent to a third-party application, or do you initiate a sign request?
What gets measured gets changed. If you launch a real estate document automation initiative, it’s essential that you measure its impact on your organization over time. How much time are you saving? Are you using that extra time to impact other areas of the business?
Measure your results against the goals you set out or the expectations you had at the beginning of your document automation project. Based on what you find out, take the necessary actions.
Real estate document automation can be responsible for thousands of dollars in direct savings and tens of thousands of dollars in indirect savings or new revenue. This is from reducing the number of human errors, file storage, and time spent on documents.
This opens up many new opportunities if used properly. At this point, you know what it is, the benefits, and the steps you should take to get started on the right foot.
Let me know if you have any questions in the comments and don’t forget to share.