A contract is a legal agreement between two or more people or parties where both parties agree to sell / buy a product or provide a service at a predetermined price/commission, before specified closing date. In real estate, contract is one of the last stages negotiation after managing listings, generating inquiries and managing showings. Here is more information on the contract and how it can be managed within a CRM application.
Understanding Real estate Contract Management
In real estate, a Contract is a legal agreement between seller and buyer which includes information of agent and customer parties, description of the property, the selling price of the property, the closing date of property, terms of possession etc. The main purpose of the real estate contract is to represent the commitments of both parties entering an agreement to buy/sell a property.
In CRM, a real estate agent can create and maintain contracts for specific listings and contacts using the “Contracts” module. Contracts module within CRM consists of listing, contact fields which is used to select contacts and listings, sales stage which is used to track the status of the contract, expected closing date of contract etc.
Understanding the commission calculation
Real estate agents earn money in the form of commission for selling the property to customer. Within CRM it is calculated based on commission percentage.Specified contract amount is calculated automatically based on the listing price which is the selling price of the particular property.If the listing price of the property is “X” dollar and commission percentage is Y% then the amount real estate agent earn from the particular contract is y% of X dollar.
Below image is an example of contract amount calculation based on listing value (price) and commission percentage entered. It may not be noted that sometimes, the commission calculation may be more complex and can be over-ridden manually into the application.
In the above image, listing value is $739,900.00 and commission percentage value is “2%”. So contract amount = 2% of listing value ($739,900.00) which is $14,798.00.
Steps to create a contract in CRM
- Navigate to contracts module and click on “create contract” button
- Enter details for contract, select contact and listing, enter contract name, select sales stage, commission percentage and Expected close date etc. and click on save.
Detail view of contract
In detail view “Contract Amount” and “Listing Value” fields are automatically populated based on commission an listing selected, contract amount is calculated based on commission calculation process mentioned above.
Viewing sales pipeline in charts
Sales pipeline chart is used to show how much money real estate agent is going to make from the sales deal. In SuiteCRM, contracts created by the real estate agents are managed/maintained based on the sales stage field. Sales stage field is a drop-down field which includes options like “Enquiry Received, Showing Completed, Loan Approved, Closed Successfully, Contract Lost”. Real estate agent would change the status of the sales stage based on the progress of communication with the customer/client. Sales pipeline chart display the contract’s sales stage information with the sum of the contract amount for each sales stage. We can view pipeline by sales stage chart of contracts on SuiteCRM dashboard which will help the real estate agents to track the contracts based on sales stage value and managing contracts to get closed successfully.
Below is the image of chart “pipeline by sales stage for contracts”.
When we click on specific sales stage on chart, it would redirect to the list view of contracts which will display only specific sales stage contracts. Below image is the list view contracts displayed when we click on closed successfully sales stage on chart.
Closing the Contract
When a property is successfully sold to a customer then the real estate agent can change the contract’s sales stage value to “closed successfully”. When a contract is closed successfully then listing belongs to that contract will get closed and the listing status will become inactive and a listing closing date will automatically generated, which will help the real estate agent to differentiate the closed listing with open listings.
Below is the image of closed contract
Below is the image of listing when a contract is specific listing is closed.
By following the above procedure, a real estate agent can create and manage his / her contracts in SuiteCRM and view the sales pipeline for the contracts and make the progress to close a contract successfully and get a commission for selling properties to customers.
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