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About 43% of corporate counsel reveal that contract-related tasks take half their day. What if your real estate firm can simplify these functions?
Business process outsourcing (BPO) is a cost-effective approach to optimizing your real estate firm’s contract management process. Its scalable solutions relieve you of time-consuming contract-related tasks and help mitigate risks.
If you want to learn more about real estate BPO services and how they can help you manage your contracts, this article is for you. It covers a BPO company’s nature, services, and benefits.
Real estate outsourcing for contract management
To start, what is BPO? It is the subcontracting non-core functions, such as contract management. BPO is a widespread practice among businesses. According to Statista, its global market value could reach $390 billion in 2024.
BPO providers actively recruit real estate virtual assistants (VAs) to help manage tasks. Supporting client organizations’ internal teams is what real estate VAs excel at.
Third-party firms also leverage advanced technologies to streamline outsourced processes. Given contract management’s complex and resource-intensive nature, outsourcing can be an invaluable strategy.
Here are some contract management tasks real estate outsourcing teams typically cover:
1. Contract drafting and review
BPO teams oversee the creation of real estate contracts and template management. Real estate VAs are familiar with relevant local, state, and federal laws, such as:
- Contract law covers the contract’s formation, interpretation, and enforcement.
- Property law encompasses property rights, ownership, and interests.
- Real estate transaction law covers the buying, selling, leasing, and financing of real estate.
- Consumer protection laws safeguard consumers from unfair practices.
- Fair housing laws prohibit discrimination in housing based on protected characteristics.
- Environmental laws cover hazardous material disclosure, the Clean Water Act, zoning laws, etc.
In addition to contract creation, VAs follow best practices, including data security and contract clarity. Additionally, they standardize templates to speed up this process.
2. Contract execution and database management
Outsourcing teams use e-signature platforms to facilitate quick and secure signing. They also distribute contract copies to all relevant parties and ensure everyone has signed and received the document.
Real estate VAs keep digital copies of signed contracts for easy access and reference. They centralize the documents’ organization in a secure repository, leverage the search function, and store additional information about each agreement.
3. Contract compliance monitoring
BPO teams ensure your real estate firm’s contract management strategies adhere to evolving legal and regulatory landscapes. It’s one of the many reasons to hire a real estate VA.
VAs perform the following tasks to maintain compliance:
- Track changes in legislation (e.g., subscribing to legal updates, attending industry conferences, and utilizing legal databases)
- Review contracts for compliance (e.g., assessing existing contracts against current legal and regulatory requirements)
- Implement compliance checklists (e.g., creating references tailored to contract types that address specific legal obligations and industry standards)
- Provide compliance reports (e.g., highlighting contract compliance status, identifying potential issues, and recommending corrective actions)
4. Contract renewal and termination
Managing a contract’s life cycle is daunting and requires effective negotiation and communication skills. By partnering with a BPO provider, you can quickly gain the necessary expertise to handle relevant tasks, which include:
- Sending renewal notices. VAs notify all parties about salient contract terms, expiration dates, and renewal options.
- Negotiating contract terms. Outsourcing teams collaborate with involved parties to analyze market conditions, assess business needs, and draft contract amendments.
- Processing contract extensions. BPO teams can help with real estate contract approvals, extension agreement management, and contract record updates.
- Managing contract termination. VAs send termination notices, calculate fees or obligations, close the contract, and coordinate with relevant departments.
5. Dispute resolution
Disagreements in real estate contracts are common. Although outsourcing providers do not handle legal disputes, they can provide support in the following:
- Documenting disputes (e.g., maintaining a dispute log, preserving emails and correspondence, gathering support documents, and creating timelines)
- Facilitating communication (e.g., scheduling meetings, distributing information, mediating discussions, and managing communication channels)
- Preparing for mediation or arbitration (e.g., compiling dispute summary, coordinating with legal counsel, booking arbitration sessions, and preparing for opening statements)
The benefits of BPO services for real estate contract management
BPO in real estate contract management offers many benefits. A reliable service vendor provides qualified VAs and improved access to advanced technologies at competitive rates. That’s how outsourcing works to your advantage.
Leveraging these resources empowers your real estate firm to streamline and scale operations. Let’s discuss the different benefits of outsourcing contract management to a real estate BPO provider:
1. Reduce costs
The most prominent advantage of partnering with a BPO company is decreased expenses. In Deloitte’s 2023 survey, 83% of respondents reported achieving cost savings through the practice.
Here are some ways outsourcing can help you save on expenses:
- Reduced labor costs. BPO providers typically operate in countries with more affordable living standards, which translates to lower wages.
- Fewer technology investments. Reputable service vendors offer seamless system integration and advanced technology, eliminating the need for additional investments.
- Lower overhead expenses. Working with real estate VAs entails remote work, allowing you to save on office rent, equipment, and utilities.
2. Boost operational efficiency
According to Bloomberg Law, 43% of corporate counsel claim contract management takes up at least half of their day. Companies without dedicated teams take longer to accomplish contract-related tasks.
BPO expertise and tools simplify real estate contract management. Outsourcing teams automate workflows and standardize processes to accelerate the contract life cycle. For instance, saving e-signatures decreases time spent on obtaining approvals, resulting in a faster turnaround.
BPO providers implement rigorous quality control measures to minimize errors in contract drafting, review, and execution. The enhanced accuracy prevents delays.
3. Enhance focus on core real estate activities
With qualified real estate VAs performing tedious tasks and cutting-edge tools streamlining routine processes, you can shift your internal team’s focus to higher-value activities such as:
- Conducting market research and analysis on property values, market trends, demographics, and economic conditions
- Developing effective sales, negotiation, marketing, and client relationship management strategies
- Managing properties, including overseeing maintenance, repairs, tenant relations, rent collection, budget, financial reporting, and regulatory compliance
- Analyzing investment trends, evaluating property value, assessing potential returns, identifying and mitigating investment risks, and predicting trends
Unity Communications’ real estate case study perfectly illustrates this benefit. The report shows how a prominent Florida real estate firm outsourced customer service operations to the BPO company. The business reclaimed 10 to 20 hours per week, which it spent on increasing sales and achieving goals.
4. Avoid non-compliance risks
BPO teams assist your real estate firm in complying with contract management policies.
They improve risk mitigation strategies, helping you avoid costly litigation, legal disputes, financial penalties, and lower insurance premiums. These benefits enhance economic performance.
Additionally, effective risk management prevents contract-related disruptions, ensuring uninterrupted operations. It also improves your track record, boosting your real estate firm’s reputation.
5. Increase scalability and flexibility
Scalability is critical in business operations, especially in dynamic industries such as real estate. BPO providers offer a flexible solution to manage fluctuating workloads so firms can adapt to changes brought by the following:
- Seasonal fluctuations
- New projects (short-term or long-term)
- Business growth
- Market demands
- Economic conditions
Outsourcing companies have readily available VAs who can promptly respond to unexpected surges in contract volume. Additionally, you can maintain a leaner BPO team during slower periods. This scalability and flexibility optimizes resource allocation and prevents overstaffing and understaffing.
The bottom line
BPO is a cost-effective way to alleviate the administrative burdens of real estate contract management. BPO staff covers every process step, from drafting to review execution, renewal, and termination. They also support database management, compliance monitoring, and dispute resolution.
BPO expertise and technologies can speed up operations, improve scalability and flexibility, mitigate risks, and let you focus on other lucrative activities.
Let’s connect if you want to learn more about real estate outsourcing for contact management!
