What is the role of the contract management system in the Real Estate Industry?

Contract management is very critical for organizations, employees, vendors, partners and stakeholders as well. Contracts make sure that entities are compliance with agreement, terms and conditions. For real estate sector contracts are the lifeblood. Real estate and all the other organizations utilize contracts for employment, invoice, purchase orders etc.  

Why contract management system is important?  

According to Software Advice, “Fifty-two percent of prospective buyers use pen and paper to conduct estimating, takeoff, big management and other processes.” In the past years, we did not have any other option other than pen and paper methods.   

But nowadays pen and paper methods are outdated and it is not an effective tool for contact management. Rather than adding value pen and paper method is prone to error. Not just that, they are time-consuming as well.  

If you want to utilize contract to its full potential then use a systematic and automated process it will be effective and useful for your business. Real estate industry needs to emphasize to computerized approach to manage contract lifecycle.  

What is the role of the contract management system?  

Agreements are centre to any business' acquirement & procurement exercises. They set out the costs, service levels, terms and provider relationship and guarantee that your organization is routinely provided with their immediate and future required inventories and supplies.   

An organization's contract management system sets out these significant details as well as controls an organization's danger of a vendor not providing good service. The benefits of using a contract management system are as follow:  

1. Ensure compliance  

1. Increase productivity  

1. Deep visibility of contract  

1. Track contract life  

The real estate organization has numerous contracts there are chances of contract loss easily in papers. A central agreement repository is an incredible tool to assist organizations with getting sorted out their data carefully. Having information in one area implies various partners all approach similar data and agreements. It cannot be done with paper-based contracts.  

Thus, the contract management system organizes data and information efficiently and most importantly digitally. It allows you quickly search contacts and in paper documents if you search for data that process might take hours.   

What are the stages of a contract management system?  

The stages of a contract management system are discussed below:  

1. Contract preparation – In this stage both parties come together discusses their request and what they are expecting. It should be clear and honest communication for a better outcome. In short, parties state your requirements, expectations.  

In this several instances are mentioned such as if the client organization goes bankrupt, if sells organization! The basic idea behind this is protect business financially so that any type of issue is avoided. 

 

1. Authoring – All the communication done is drafted and documented. In this process choosing the right word is also critical. This document has all the clauses terms and condition. This document abides parties by law; therefore, it is important what services are offered.   

Legal authorities are also involved in this stage to make contract effective and to avoid any type of discrepancies. This is where the bottleneck ordinarily happens. 

1. Discussion & Negotiation – Discussion is done about the workflow. Understanding the other company’s requirement will save your lot of time and simplifies the procedure. The terms that are settled upon ought to give clarity about expectations to both parties by both parties so that it is ensured that no ambiguity occurs.  

 

1. Approval – Once negotiations are done everyone reaches to a concrete decision. then again documented is drafted with the changes as per the requirement. Then again contact is reviewed and approval is done. If you run an organization that requires supervisor approval or has audit systems, you need to make sure that all the necessities for approval are met prior to concluding the deal.  

 

1. Execution – Now communication is done, paper work is done. It is time to make it official! Nonetheless, numerous organizations settle on agreements the nation over or even the globe, and getting signature isn't as clear as meeting face to face. Particularly if cutoff times are tight or time regions are inconsistent, short-term mail or even email may not be the most ideal approach to get signature quicker. A legitimately restricting on the web & online signature can tackle all of these issues, permitting you to move quicker. 

 

1. Contract stage – The agreement stage is the point at which the entirety of the objectives of your agreements become animated – in the event that you oversee them appropriately. Yet, the agreement stage doesn't oversee itself – This is where you must pay close attention to the clauses mentioned and terms and conditions. To ensure they are fulfilled and regularly tracked.  

How to do that? With a clear vision, setting milestone and performance metrics shall be implemented to ensure everything is in order.   

1. Contract Renewal/Termination - In this stage contract is either terminated or renewed if renews then the process might repeat again with little or no changes. Before reaching to either terminate or contract renewal time is taken to make a decision. If contract terminates then companies will clear their dues or penalties or default actin fees if there are any. However, there is still some housekeeping to do to guarantee that everything is wrapped up appropriately.   

Contract likewise helpful to play out a go through agreement, which can give important data and learnings that can improve the consequences of future agreements. 

  

Conclusion –  

Guaranteeing that each agreement phase of the contract runs easily is the way to effective contract execution in real estate industry. Having the correct tool such as asset management software will ensure that. As we know that contract lifecycle is a very long task. It requires cautious readiness and balance so as to be done appropriately especially in real estate industry.   

Any slip-ups in the process can cause significant mishaps and free your association up to monetary harm (either through fines, expenses, or punishments). By experiencing the stages depicted above, you'll be able to handle the agreement process more efficiently and stay away from a wide scope of mix-ups and traps. Therefore, contract management is very critical for real estate industry.