This blog is about 900 words long, or a 4–minute read.Cofounder & CSO at Veryfi
In the competitive world of real estate, profits depend heavily on efficiency, accuracy, and security in managing transactions, completing verifications, and in ensuring that the various documents involved in multi-step real estate processes get applied into the right areas. Yet, many real estate companies, property managers, and medium-scale landlords continue to rely on legacy software and manual paperwork. The many steps in selling, buying, closing, renting, transferring, and so on are riddled with bottlenecks and inefficiencies. The outdated methods slow down operations, introduce critical errors and security vulnerabilities that can significantly hurt profits. Using the appropriate software for handling real estate activities is proven to increase operational efficiency and mitigate risks from both financial and identity fraud.
Costs of Staying Manual or Legacy
1. Slow Document Processing
One of the most significant drawbacks of legacy systems is slow processing times. Real estate transactions involve a mountain of paperwork, from purchase agreements to lease agreements and everything in between. In case of handling these documents manually, the time required to process and complete transactions increases dramatically. Delays in finalizing agreements or onboarding tenants can lead to lost opportunities, missed deadlines, and frustrated clients. All of this negatively impact profitability. Research from McKinsey shows that delays in any transaction processing can increase operational costs by as much as 30% . Additionally, slow processing times can result in up to 15% of deals falling through, leading to financial losses.
2. Inaccurate Records
Another issue is the prevalence of inaccurate records due to manual data entry. Real estate transactions require precise documentation, and even minor errors can have major consequences. Mistakes in recording details on property deeds, rental applications, or mortgage documents can lead to legal disputes, compliance issues, and a tarnished reputation. According to real estate industry reports, errors in manual data entry contribute to a 20% increase in transaction costs due to the need for rework and correction. It shows that companies that rely on inaccurate records face a 28% higher chance of experiencing legal disputes. This can result in costly settlements or fines later on. Involving legal to sort out the mess created from preventable mistakes is never fun.
For smaller REITs and medium-scale landlords who are essentially running businesses, one of the most crucial use cases is maintaining accurate records of receipts, invoices, and other critical documents. This helps to ensure proper tax filing and efficient accounts payable management throughout the year. By keeping precise and organized records, they can avoid costly errors, streamline financial reporting, and meet regulatory requirements with confidence. Implementing a solution like Veryfi Lens document capture and ADocs LLMs for data extraction can automate these steps, making it easier to manage finances and stay compliant. These are steps that ultimately safeguards a business against risks.
3. Security Loopholes
Security concerns are also a critical issue with legacy systems. Paper-based documents and outdated digital storage methods are vulnerable to unauthorized access, loss, and data breaches. In an industry that handles sensitive personal and financial information—such as tenant records, credit reports, and confidential contracts—these security lapses can be disastrous. The cost of a data breach in the real estate sector averages $4.24 million per incident, according to IBM’s 2023 Cost of a Data Breach Report. This figure includes costs related to lost business, regulatory fines, and remediation efforts. Additionally, nearly 60% of small businesses that experience a significant data breach have to close within six months, highlighting the severe impact on profitability and business continuity.
Modernizing Real Estate Procedures
To counter these challenges, real estate companies, property managers and landlords need to move away from legacy systems and embrace modern, digital solutions. Veryfi offers advanced document capture and data extraction technology that can revolutionize the way real estate transactions are handled. Veryfi’s solutions automate the extraction of vital information from documents, such as purchase agreements, lease agreements, and property deeds. This reduces the risk of errors and speeds up the transaction process. By digitizing paperwork, Veryfi enables real estate professionals to manage transactions more efficiently and accurately. This shift not only cuts down on processing times but also enhances the overall experience for both clients and professionals.
Security is another area where Veryfi excels. Veryfi is SOC 2 Type 2 secure and GDPR compliant, ensuring that sensitive documents like tenant records and mortgage applications are handled with the highest standards of data protection. These certifications mean that Veryfi is capable of managing and storing real estate documents securely. This safeguards them against unauthorized access and potential breaches. This level of security is crucial for maintaining client trust and protecting the financial interests of real estate businesses.
Finally, Veryfi’s technology integrates seamlessly with existing systems, allowing real estate companies to upgrade their operations without disrupting current workflows. This integration accurately captures, stores, and makes all data from rental applications to confidential contracts accessible when needed. This bridges the gaps that often exist in legacy systems. With Veryfi’s SOC 2 Type 2 security, GDPR compliance, and LLMs that never hallucinate, real estate professionals can trust that their documents extraction is in safe hands, ensuring that they remain competitive and profitable in a rapidly evolving industry.
By transitioning to digital document processing with Veryfi, real estate companies can streamline their operations, protect sensitive data, and ultimately improve their bottom line. In an industry where precision and speed are paramount, embracing modern technology is essential to stay competitive and profitable. Sign up to try us out.