Real estate agents who handle M&A transactions quickly become accustomed to the large volume of documents with which they must become familiar. Technology has made it possible to speed up work by exchanging electronic versions of documents. Consider a useful technology virtual data room for real estate agents.
What are the Different Data Room Options Available to Real Estate Agents?
The successful administration of a real estate investment trust (REIT) and real estate investment transactions requires the exchange of multiple documents between multiple third parties. This process is manual and involves faxing, copying and forwarding documents by mail and/or digital media, which adds significantly to the cost and time involved in this process.
Data leaks do not only occur due to external or internal intruders. They are often caused by the transmission of documents to external parties via private accounts on public cloud platforms. Even email transmissions can be insecure, as information leaks to public networks and the company loses control of it.
This is why real estate firms around the world are actively seeking virtual data room solutions to facilitate the distribution, organization and tracking of underwriting materials, investor information and due diligence documents in large real estate transactions. You can read more about VDRs at https://dataroom-rating.us/real-estate-data-room/.
A Few Words about VDR
A virtual data room is a storage facility located in a private cloud or inside the organization’s secure perimeter. Its main purpose is to provide authorized users with access to documents via the web interface or special applications. Traffic between the client and the storage is necessarily encrypted, and in some cases, the functions of a digital restriction management system (DRM) can be implemented. Then the documents themselves are also encrypted. The best data room providers are usually used for large corporate transactions, for providing access to the company’s reports during the audit process, for transferring information to investors, as well as in other situations where it is necessary to outsource business-critical data.
To send files, the user uploads them to the repository, sets up access, and sends the recipient a link. The process can be automated since many developers implement integration with file managers, email programs, messengers, and other popular software in client applications. In this case, the process of downloading and sending it does not look much more complicated than attaching an attachment to an e-mail.
Data Room Solutions for Real Estate Agents
It is quite important to make a data room comparison before choosing with what provider to work.
Many agents use Dropbox or Google Docs and Google Drive as part of G Suite services to share data. Public cloud services do not support DRM technology, nor do they have advanced document rights control capabilities.
Real estate data room software is a secure, cloud-based digital platform used to store and share data during real estate transactions. Using a real estate data room, sellers, buyers, investors, advisors, real estate brokers and other interested parties can communicate seamlessly, access and share documents, and conduct due diligence.
With the help of data room software, the agents will be able:
- easily and safely structuring real estate documents;
- have easy access to documents;
- organize due diligence;
- have easy and fast communication between buyers and sellers;
- opportunity for real estate visual tours;
- have 100% document security.
Buyers, investors, realtors and even sellers today prefer online routes such as virtual data rooms for real estate transactions. In this case, virtual data room comparison will be appropriate as today there are different providers with different options. Here are several data room vendors options for real estate agents:
Virtual data room providers not only provide data security but also allow for secure communication, due diligence and management of real estate projects.
Who Needs Data Rooms?
Potential customers should not be limited to certain industries, primarily virtual data rooms are needed by financial services companies, construction and design organizations, law firms, as well as providers of communication services and retailers. They often work with mission-critical information and need a means to securely send documents to external contractors or remote branch offices. These customers require flexible document access rights, document lifecycle management and even DRM protection.
Online data room software is widely used to organize, curate and disseminate due diligence and investor information at every stage of the project or asset lifecycle.
How Secure Is It?
A virtual data room provides an increased level of security for the documents placed in the repository based on centrally managed policies. They can only be accessed after authentication (most often by a two-factor authentication), and permissions are much more flexibly configured than in public cloud services.
With virtual data room services you can, for example, allow viewing a document (or, in some cases, a part of it) in a browser, but not allow downloading. VDR has protection against man-in-the-middle attacks, and access permission can be revoked or granted for a limited period of time. The client software controls the removal of documents on the user side and blocks downloads from the repository.
How to Choose a Solution?
There are quite a few specialized products on the market with different capabilities and price categories. In general, when it comes to organizing virtual data rooms, one should focus on complex solutions that allow users to manage documents from the moment they are uploaded to the repository until they are deleted by the company. This requires DRM technology support, as well as agent software for desktop and mobile operating systems.
The due diligence process must always be considered and implemented accordingly. It starts with the creation of virtual data rooms, their conceptual design, and the completion of the purchase. An electronic data room for real estate is the safest way to structure and share all types of documents. Moreover, you can control the user’s activity in the data room.