The high-stakes property scenario
Picture this: You’re on the final leg of a big property deal. Everything seems perfect. The building’s been inspected, financing is locked in, and the closing date is set. Then suddenly, chaos erupts. A critical email about environmental zoning requirements vanishes into an inbox black hole. A last-minute contract change gets lost in a WhatsApp message. Just like that, your entire transaction is delayed or even teeters on the brink of collapse. Sound familiar?
In the complex landscape of real estate transaction management, communication is more than a courtesy—it’s a strategic imperative. Ineffective communication can erode a company’s competitive advantage, potentially jeopardising high-stakes deals and professional relationships.
Measuring the costs of poor communication
A recent collaborative study by Drooms and Statista has confirmed what experienced real estate professionals have always intuitively understood: Effective communication is a critical determinant of success in property transactions. But what is the measurable impact of miscommunication? This new research has unveiled the costs of poor communication in real estate transaction management, measuring the time, money, trust, and confidence lost.
50 real estate managers in property companies, developers, investment companies, financial institutions and facility management were surveyed via in-depth, structured telephone interviews. The results reveal significant losses in efficiency and effectiveness, prompting dealmakers, investors and real estate managers to find new ways to improve transaction management communication.
Critical success factor in transaction processes
The research identifies that effective communication is number 1 of the top 5 factors that are vital for successful deal management. It also has a big part to play in the other 4:
- Effective communication (e.g. cooperation between the parties)
- Transparency between the parties
- Speed of the process
- Data security
- Adherence to legal regulations and compliance guidelines
The communication paradox
Here’s the mind-bending twist: Communication is simultaneously the most crucial success factor and the biggest obstacle in real estate transactions. It’s like saying a foundation is absolutely essential to a building, but creating that perfect foundation is extraordinarily challenging. Let’s dive into the numbers that reveal this communication crisis:
- 76% of real estate managers say aligning and collaborating with stakeholders (buyers, sellers, agents, lenders, inspectors) is their greatest challenge
- 66% struggle with the sheer number of people involved in a single transaction
- 62% point to a lack of transparency as a major pain point
- 60% find the complexity of transaction processes overwhelming
The communication maze
The challenges are then compounded by the multiple channels used during a typical real estate transaction. Today’s real estate professionals have to be communication acrobats, regularly accessing and distributing information using a wide variety of tools – all of which operate independently of each other. This adds to the complexity and increases the risk of vital messages being missed or lost in communication silos.
- 100% use email (the universal communication tool)
- 90% rely on phone calls
- 82% use video conferencing
- 80% employ centralised communication platforms such as deal platforms, Microsoft Teams, Slack etc.
- 14% even use WhatsApp (raising serious security and compliance red flags)
The widespread adoption of collaboration and messenger tools like Teams, Slack, and WhatsApp presents significant potential vulnerabilities in organisational security and regulatory compliance. These platforms, while convenient for team communication, introduce critical risks that demand immediate and strategic attention.
Organisations must carefully evaluate the security implications of these communication channels, implementing robust policies and technological safeguards to protect sensitive information and maintain compliance with industry regulations. This fragmentation creates a communication minefield. An important inspection update shared in a Zoom call might never make it to the email chain. A crucial lease term question sent via WhatsApp could float in digital limbo.
The result? 35% of respondents report frequent misunderstandings and information loss. And with an average deal taking nearly 7 months, miscommunication is inevitable at some point in the process.
The devastating cost of missed messages
“Sorry, I didn’t see that email” is potentially a hugely expensive oversight. The study reveals the true impact of miscommunication during the deal cycle:
- 72% lose critical information relating to property deals
- 70% experience delays in property acquisition decisions
- 70% face closing process delays
- 68% encounter misunderstandings between parties
Alarmingly, 64% saw increased transaction costs due to poor communication during the deal-making process.
Nearly half (49%) of real estate managers have witnessed property deals get delayed, jeopardised, or completely fall apart due to communication problems. That’s like flipping a coin on whether a deal will go through successfully or not!
Time: The ultimate casualty
The time spent managing communication is devouring professionals’ time:
- 74% spend one-fifth to half their working hours on communication
- 26% spend more than half their day communicating
- Some professionals dedicate up to 90% of their time to communication activities
But that’s only part of the story. The amount of time lost that could be spent on more productive activity is eye-watering:
- 94% of real estate respondents lose 30+ hours during the 7-month typical transaction process, due to communication issues
- For 18% of professionals, that figure rises to over 150 hours—nearly an entire month’s work, vanished into thin air!
Trust: The invisible casualty
Beyond operational challenges, poor communication erodes something more valuable in real estate deal management: trust. 12% of respondents cite loss of trust as a direct consequence of communication failures. In an industry built on relationships and reputation, this is worrying. When stakeholders can’t rely on clear, consistent communication, the entire transaction ecosystem becomes unstable.
The professional’s wishlist
The research reveals a clear wish list of improvements respondents are seeking to effectively manage complex real estate transactions. If real estate professionals could redesign their communication world, they’d want:
- Real-time transaction status notifications (72%)
- Better message and document traceability (62%)
- A centralised information system (62%)
- Improved document sharing (54%)
- Stronger confidentiality protections (38%)
The way forward: Centralise, standardise, prioritise
The good news is that bridging communication gaps is more achievable than many realise. By streamlining communication channels using a centralised platform such as a Drooms data room, real estate professionals can transform their approach and elevate their transactional success. Integrated communication features such as Drooms Chat, the first messenger for dealmakers launched in 2024, are designed to address communication challenges, providing:
- A single source of truth
- Traceable messaging
- Real-time updates
- Secure data sharing
The real estate communication revolution
Communication in property transactions isn’t just about exchanging information—it’s about building trust, enabling collaboration, and ensuring successful closings. The next time you’re tempted to send a critical update, it’s worth bearing in mind that the success of your deal might just depend on how well you communicate. In the high-stakes world of real estate, the difference between “message sent” and “message received” could be worth everything
If you’d like to learn more about how Drooms Chat can improve your communications, please click here or get in touch with our team of experts at contact@drooms.com.
About the research
Between October 4 and October 29, 2024, 50 real estate managers and 50 M&A managers were surveyed by Statista on behalf of Drooms via structured telephone surveys. The survey covered dimensions such as the time spent on communication in transaction processes, the communication tools used, and the cooperation between the parties involved in transaction processes. 48% of the real estate managers work in real estate companies, 42% in investment firms, 6% in corporate real estate and 4% in the public sector. Of the M&A managers, 30% work in private equity firms, 22% in M&A boutiques, 20% in corporate finance departments, 18% in investment banks, and 10% in consulting firms.
