The cross-border real estate transaction market has crossed the mid-year line on an upward trajectory. But with the recent economic developments persisting, the performance for the second half of 2022 is expected to run a little flatter. Despite the odds, the Euro to US Dollar parity resulting from the rising inflation in the Euro zone could attract investors from overseas.
Given the expected mid-term resiliency, how can digitisation accelerate the cross-border deal making processes?
We looked at the major challenges of cross-border transactions specifically into or within Europe, and found that digitisation can help in many ways:
Navigate different standards and regulations
It is important to know how the real estate market and transaction business work in different European markets, as thorough documentation of the sales process is required for cross-border transactions to proceed successfully.
Differences may include national and regional tax regulations, data protection policies, the availability and reliability of the company’s financial data, or legal issues relating to patents and trademarks.
You have to ask yourself: What regulatory requirements apply in the respective target country, what special features have to be observed in the respective market and how are the work processes handled internally and externally?
Overcome cultural and linguistic barriers
Cultural and linguistic variations may present difficulties in conducting negotiations, drawing up the purchase agreement and working together.
Deal makers must follow specified business processes with transparency in order to prevent competence mismatches or unintentional errors. Virtual data rooms are ideal for this purpose, where all relevant steps are documented, tracked and uniformly regulated on one platform.
Drooms’ software also plays an important role in bridging the gap between language barriers and data safety. Its AI-supported translation tool enables instant translation into the preferred language while maintaining the same document layout. Sensitive information is also kept and translated on one platform, to eliminate potential data leak on external translation sites.
Ensure data access and transparency
Another challenge in the asset documentation process when doing a cross-border deal, is data access and transparency. Sellers need to ensure documents relevant to the respective transaction can be accessed by the authorised party at any time, from anywhere.
This requires a “single source of truth”: a centralised database that has been populated with the necessary information in a structured manner and is updated regularly.
How can Drooms make cross-border transaction processes more efficient?
Drooms data rooms make transaction data secure, transparent and readily accessible. Having it all in one place saves a lot of time during the due diligence and closing phases of a deal. All the stakeholders collaborate in one platform and always work in the latest version of a document.
Communication and improved workflows: The internal communication flow is optimised through structured processes, and misunderstandings are prevented when the latest versions are automatically saved. Drooms’ AI-supported translation feature also comes in handy, by enabling people from different countries to view documents in their own language.
Security: Data protection and security must always be the top priority for all parties involved, especially in Europe, due to the strict requirements of the EU-wide General Data Protection Regulation (GDPR). As a European, GDPR compliant provider, with servers exclusively in Europe, Drooms meets the highest standards in data security.
Review and analysis: One of the most important parts of a transaction, is the due diligence process. The standardised mapping of the information and the transparency provided with review history gives you maximum control of your data, and understanding of what potential investors are interested in.
To learn more about how Drooms can help you optimise your workflow during a deal, contact us!
