Key Differences between CRM and Real Estate Deal Management

A common question and costly source of confusion when researching software solutions for your firm is understanding the important differences between Customer Relationship Management (CRM) and Real Estate Deal Management. 

To put it simply, CRM systems are designed to track contacts in the form of people and companies through sales stages internally, whereas Real Estate Deal Management platforms are designed to collect and analyze real estate data and transaction workflows, with secure internal and external collaboration.

While both are crucial components to any modern real estate business, they serve complementary but different purposes.

Key Differences

Product Design 

A CRM system’s design, ontology, and functionality are all optimized around contacts. This structure is effective for tracking data directly related to a contact, from its phone number to the last time the contact was engaged by your organization. 

In contrast, a Real Estate Deal Management platform is designed around real estate transactions, and the workflow management pertaining to those transactions. From sourcing and underwriting through contracting, due diligence and closing, the platform optimizes the real estate investment workflows.

Collaboration + Role-based Access

Given the highly relational and complex aspects of real estate investment, it’s critical to have seamless collaboration across teams, partners, and systems.

A CRM system is designed for internal collaboration only and does not allow for external collaboration.

For a real estate investment team, however, every transaction requires many partnerships with both internal and external parties, and different levels of access to protect sensitive and proprietary data. Without these robust collaboration capabilities, information must be manually selected and shared over emails, file sharing services, etc. which is both highly inefficient and a significant data security risk. 

A Real Estate Deal Management platform is specifically architected for these real estate-specific collaboration needs, including allowing for various access rights and communication capabilities, and ensuring strong data security with efficient deal execution.

Task + File Management

The ever-increasing complexity of real estate investment and development has driven the need for specialized project management. 

A CRM system’s day-to-day goal is to simply track contacts and their interactions. It is not intended for complex task-based work with extensive file management needs

For a Real Estate Deal Management platform, there are native features dedicated to the management and transparency of staffing, tasks, and files all centralized within an intuitive interface that is fast and responsive, promoting adoption and use.

Built-in Integrations

There is no “All-in-One” platform in today’s real estate industry. That’s why in order to leverage your data and best-of-breed solutions, it’s extremely important to have the capability to integrate with other relevant tools. 

A CRM system is a generic, horizontal solution designed for sales teams across many different industries. As such, they do not have existing built-in integrations with real estate data providers and software tools – all data must be manually entered and manually transcribed between systems. 

In contrast, Real Estate Deal Management platforms are designed for interoperability with existing native integrations to data sources and softwares used by real estate firms. Lease comps, demographic data, property accounting systems, valuation tools, portfolio monitoring tools, etc. are all instantly available.

Reporting + Data Visualizations

While gathering and organizing data is time-consuming and often repetitive, perhaps the bigger challenge is producing digestible reports that are optimized for actionable insights. 

A CRM system, due to the structural and collaborative limitations listed above, is unable to provide the reporting that real estate investment teams require. As a workaround, teams export data to Excel in an effort to combine and manipulate info for pipeline reports, deal tear sheets, IC memos, and quarterly investor meetings. 

With modern Real Estate Deal Management platforms, clients have a collaborative database of every deal and asset that the firm has ever looked at. It’s intuitive and completely self-service to create and edit the reports and analyses that real estate teams require. It’s delivered in real-time and available wherever you might be working.

Implementation + Ongoing Support

We’ve talked a lot about the technical differences between CRM and Real Estate Deal Management, but every successful software adoption also relies greatly on the human aspect, starting with implementation.

CRM systems usually require a minimum of 4-8 months of implementation with the aid of experienced (and expensive) consultants. All future updates, upgrades or maintenance are equally challenging, expensive and onerous.

On the other hand, a Real Estate Deal Management platform is deployed in weeks, following a personalized implementation led by a dedicated Solution Architect and Customer Success team that work exclusively with real estate investment management firms. 

Since every real estate investment team is constantly evolving, having a highly configurable and intuitive user interface along with dedicated resources that understand real estate, make the process of adopting a cloud-based Deal Management platform a vital and empowering component of any modern real estate investment management business.

Next Steps

We know this is a very important topic, and you may still have some questions; as such, we have prepared a free toolkit below, which includes (1) Feature Comparison Matrix, and (2) Evaluation Checklist.

Download the toolkit and have the knowledge you need at your fingertips as you go through your Software Evaluation Process.