All You Need to Know About Real Estate Document Processing
Central to real estate back-office processes, document processing is the cornerstone of both, operational and strategic success for real estate companies. Switching to intelligent automation-led re-engineering facilitates process standardization and optimization while empowering real estate companies to fully harness human talent. Document processing is as important in the real estate industry as it is for any other business.
Here are two examples, though not from real estate; that can spur realtors to become serious about having robust data processing mechanisms.
· The catastrophic failure of Mars Climate Orbiter made NASA lose more than 190 million dollars. The cause and effect analysis allowed the world’s leading aeronautics and space research agency to attribute project failure to erroneous document processing.
· Extremely poor documentation led to flawed reactor design taking the lives of 30 operators in the Chernobyl disaster. The post-accident analysis revealed that having strong documentation on safety procedures could have averted the tragic incident.
Here are some more document processing statistics that reveal some ugly truths.
Having understood the criticality of document processing, it now becomes critical for leading players in the real estate industry to strongly focus on having a robust and efficiency-driven document processing and management.
Keeping this in mind, this article is intended to guide you to successfully handle real estate document processing. Along with the importance of, challenges associated with, best practices in document processing, and a brief note on how automation is revolutionizing real estate document processing.
Typical real estate documentation workflow
Document Management and the Rising Challenges in Real Estate Industry
21.3% of productivity loss is what document challenges account for. IDC — global market research firm.
Document processing in real estate is an extremely complex activity; not just because of the sheer volume of transactions, but also due to documents like agreements, sale and title deeds, tens of certificates, including NOCs, receipts, etc. which need to be handled at different stages. Non-skilled staff or apathy towards handling documentation proves to be a nightmare for real estate companies. They then only witness their operators rummaging through the documents, leaving entire operations hampered and mismanaged.
While you think to revamp your real estate document processing lifecycle, let’s have a look at some of the real estate document processing challenges:
A. Multi-stage process that increases the scope of complexities: Each step in a typical real estate document value chain requires the document to be verified, manipulated, or validated. The complex nature of the document processing lifecycle, therefore, poses critical tasks of ensuring information accuracy and preventing information loss for owners of these processes.
B. Excessive paperwork: The problems of mounting document volumes grip operations managers. Linked to this are various overheads such as the requirement of separate storage space, adopting and continuously ensuring robust security mechanisms for preserving documents against probable untoward disasters like fire, damping, floods, intentional tampering, and theft, etc.
C. Monotonous nature of tasks: Property selling processes comprise of document handling and processing activities which make the life of document professionals, monotonous. They feel like switching from handling title deeds to processing invoices, but the fear of dipping accuracy prevents operations manager from facilitating such movements. Long-term involvement in mundane tasks, therefore, makes operators dull and uninteresting.
D. Ensuring that security is not compromised: Companies often grapple with what security mechanisms to bring in so that confidential information and vulnerable points can be kept secured. With a paper-based system, a plethora of security challenges exist for which they often must collaborate with external experts or especially get trained.
E. Authentication delays: A real estate document cannot move from one stage to the next stage unless and until it gets duly authenticated by the process owner/concerned authority or even the customer. And unexpected occurrences like the COVID-19 pandemic prevent physical movement. Such instances become a major bottleneck in manual authentication leading to a delayed transfer of property to the customer.
Real Estate Document Management Tips
Here are certain best practices that you must follow for implementing a successful property documentation processing and management system.
1. Adopt a knowledge management process
Real estate document processing requires process owners to have perfect knowledge about and expertise in multiple areas. Having a customized knowledge management framework allows in-house teams to fast adapt to changing practices and quickly move up the learning curve.
- Informed and well-trained staff is an immediate benefit that knowledge repositories offer. Improved response time, enhanced service quality, and improved communication process are some other benefits offered by knowledge systems in the long run.
- Most importantly, strong knowledge capturing, and storage mechanisms allow managers to divert professionals to focus on creativity and innovation.
2. Regularly audit documents for information validity and reliability
The role of property documents doesn’t get over when a property gets successfully handed over to its rightful owner. The importance of historical records for future purposes makes audits imperative. Remember, the absence of audits in property document management means rendering your information highly vulnerable to unauthorized manipulations, which can lead to stakeholders’ lack of trust in your services. Two-step efficient audit process:
- Carry out a thorough study on what standard audits are followed to maintaining various real estate documents — title deeds, contracts, leases, and mortgages, etc.
- Consult an audit expert to come up with periodic (quarterly, annually) procedural, finance, and data audits.
3. Create efficient document archives
Yes, the true success of a property document processing system can be gauged through how efficiently it archives documents. The significance of archiving information is that it prevents the loss of inactive but ever-valuable information. However, what is important in real estate document archiving is not just correct storage of documents, rather creating a strong document classification structure and following that strictly.
A strong document archiving solution also helps to manage and monitor real estate documents, through the right classification structures, which make searching through old records easy. Whether you follow a manual or automated process, archiving is essential to comply with legal norms as well as helps in offering required security to property records.
4. Regularly brainstorm for improvement initiatives
The involvement of real estate dealers, mortgage professionals, lawyers, brokers, regulatory authorities, and the seller and the buyer; as well as changing and updating legalities require robust document processing to allow easy and quick incorporation of new policies and changes across document lifecycle.
Strong inter-linkages amongst processes and sub-processes and authentication requirements demand that even a small change in real estate document processing must precede brainstorming by process owners and stakeholders.
5. Strategically deploy automation
A highly complicated procedure like real estate document processing must be subjected to automated mechanisms for improved performance of the process. But then, don’t think of facilitating a complete transformation through automation in one go. Remember, human intelligence is a result of years of experience, and machine can replace many but not all abilities that humans offer.
The nitty-gritty in property documents makes humans role must in the process. The best option for automation adoption is to enhance the abilities of professionals by giving them access to technology rather than replacing human talents with machines, which can even prove catastrophic in case of unidentifiable problems.
Incorporate a semi-automated or hybrid approach that allows process owners to impart operators with knowledge on using automation, allowing the latter to optimize not only processes’ but their time too. Professionals can spend this saved time on business development initiatives — much important in the real estate workspace.
Benefits of automating the real estate document process:
1. Accurate data gathering through OCR, OMR, and ICR leading to streamlined workflows.
2. Process re-engineering facilitating improved productivity of manpower and processes
3. Enhanced data validation mechanisms that prevent data security breaches
4. Cost and time optimization as the need for manual processing is minimized/eliminated
5. Improved experience, since time and efforts of internal as well as external stakeholders are optimized
Conclusion
21st-century real estate document processing demand workflows that can allow real estate companies to ensure improved agility and quick responsiveness. As such, document processing solutions now demand realtors to look at them as strategic drivers that potentially offer you a sustainable competitive advantage, in the long run, through operational improvements.
To allow the greatest interoperability amongst stakeholders and intra as well as inter-processes, there is no escape for realtors than going for intelligent document processing (IDP) solutions.
However, as various sources and experiences of companies enlighten you to adopting automation, remember that technology penetration must be preceded by thorough study and understanding of what best suits your context. Next, considering the complex procedural setup, a phased approach to technology implementation must be preferred.
