In spite of some unforeseen political and economic disturbances, the real estate sector in Europe remains promising. However, this situation is more in some areas than others. The region has fierce competition for deals, which makes speed a vital quality. In fact, the Drooms conducted a recent study that revealed that more than 50% of real estate experts in Europe have been sacrificing their due diligence’s quality at the expense of completing transactions quickly.
Modern technology has come up with an answer on how to complete real estate deals more efficiently. The research by Drooms showed that in cases where time pressures, particularly on due diligence have resulted in a potential drop in the quality of the exercise, parties involved in a transaction had discovered an artificial intelligence-driven technological solution, for instance, virtual data rooms.
A report published by Real Capital Analytics in February 2018 showed that the commercial property investment market in Europe returned to growth back in 2017 when it recorded the third strongest yearly expansion. The report also showed that transactions of over €500 million accounted for nearly one-quarter of the entire acquisition volume in 2017. Furthermore, the UK maintained its top rank thanks to some deals including CC Land’s acquisition of the Cheesegrater building for a whopping £1.15 billion.
Ultimately, successful deals in the real estate sector rely on detailed and high-quality due diligence. However, the competition of the most profitable deals can cause organizations to make shortcuts as far as this stage is concerned. Conducting intelligent due diligence is necessary because it boosts complexity and value of transactions, legacy details regarding sellers’ financial and litigation records, the need to comprehend more of the detail and context around variables such as present and future infrastructure as well as the tenant payment details.
Why you Need Technology in Conducting Real Estate Due Diligence?
The application of artificial intelligence in real estate deals is increasing even with perceived obstacles such as like inadequate relevant skills to apply the needed technology. The current virtual data rooms act as a sign of a future when fully-automated due diligence reports will accessible in 95% of all cases simply by touching a button. Specialists will manage the remaining 5%.
Although the need to apply technology in the estate transaction process is evident, the solutions must be intuitive, elegant and a powerful as those utilized by the consumer retrial platforms. The best step forward is for the development of intelligent due diligence processes that can take advantage of the abilities of machine learning and later AI.
The Benefits of Using AI
Over 54% of real estate experts claim that they utilize AI in boosting the keyword search process, mainly when working on deals. Some of the other processes that will be increasingly used include identifying red flags, foreign language translation, topic modeling and routing documents to the ideal decision-makers.
Most real estate experts are convinced that AI gives a firm a competitive edge by allowing a larger number and wider variety of documents to be searched fast. The technology also reduces liabilities and risks in transactions as well as the dependence on legal services.