Build a Custom Contract AI Tool for Real Estate with Ascendix
We’ve been in proptech development for 2 decades. Leverage our expertise to unlock AI opportunities and streamline your daily contract management.
Did you know that around 75% of business operations in real estate require contract management? As businesses grow, so does the complexity of contract management processes and the volume of documents they must deal with. And this is when AI for contracts comes to help. Yes, AI in contract management is poised to reshape how real estate organizations handle documents, offering unparalleled efficiency, accuracy, and legal compliance.
Let’s delve into contract AI, its types, and how contract analysis AI streamlines the most vital aspects of real estate contract management in the article below.
We’ve been in proptech development for 2 decades. Leverage our expertise to unlock AI opportunities and streamline your daily contract management.
Contract AI encompasses technologies based on natural language processing and machine learning and used in various industries to streamline and automate contract lifecycle management (CLM) processes like contract creation, review and analysis, negotiation, risk assessment, and compliance analysis.
Since real estate professionals frequently need to revisit their leases, analyzing them and searching for critical elements such as dates and conditions, the contract management can sometimes feel like an endless cycle. Most often, agents without specialized contract AI technologies turn to ChatGPT to perform activities like ChatGPT contract analysis, but tools like ChatGPT offer no security or PDF/jpeg recognition. That’s why we believe that AI in contract management is a solution that can revolutionize each CLM stage, i.e.:
AI contract generation software is a solution that developed on artificial intelligence and natural language processing capabilities, allows real estate professionals to streamline and automate their contract generation and document management process.
As the most common type of contract analytics software, AI contract generation tools often include template libraries, clause libraries, audit trails, electronic signatures, user permissions, and notifications & reminders. It can also perform contract compliance analysis and easily integrate with tools like CRMs for data extraction.
Contract review AI is an NLP-based solution that helps real estate professionals streamline the review and analysis processes of contracts and agreements. Contract review AI might not come with a contract generation module or real time negotiation capabilities, but it offers clause analysis, hence risk assessment, helping real estate professionals identify non-standard clauses or deviations from the law.
Often called ‘contract collaboration AI,’ such software is an AI for contract creation or review with a negotiation capacity that includes features like version control, audit trail, and document tracking.
This means that teams can add new data, clauses, and terms while collaborating on the document content in real time. And with version control as mentioned, you can go back to the previous version if you’re unhappy with the latest changes made by the team.
Contract compliance AI is an NLP-based solution for real estate professionals who need to perform compliance checks on property agreements, leases, and transactions, ensuring that they meet legal requirements and industry standards.
When using contract compliance AI software, real estate professionals can customize the rules and analysis criteria relevant to their geographic location. Just like automated contract review tools, contract compliance software determines potentially problematic cases, flags them, and suggests how they can be improved.
Contract summary AI is a solution that combines artificial intelligence and natural language processing for automatic summary generation of complex legal contracts and agreements in real estate like purchase and sale agreements, lease agreements, construction contracts, and others.
Why can’t you miss contract summary AI as a real estate specialist?
In 2019, a contest pitted AI against a team of five U.S. lawyers. Their challenge was to identify loopholes in legal agreements as quickly as possible. AI completed the task in 26 seconds, while lawyers continued to work for an additional 92 minutes. And when it came to efficiency, AI detected 94% of the loopholes, whereas humans identified only 85%.
Instead of wasting your time on reading contracts and detecting errors manually, you can delegate these tasks to AI contract summary. Just imagine – what if you’re having 5 meetings with potential buyers, and each of them requires you to read a contract or two?
How does contract summary AI work? Well, most contract summary AI tools have a user-friendly interface and require a user to:
Now all you have to do is wait for the magic to happen. In a few minutes, you’ll get a concise accurate summary of the document, filled with details like payment terms, prices, effective date, parties, and others.
Later, you can download the summary as a PDF file and use it during the meeting to impress your clients.
Please note that most contract AI tools don’t come in their purest form. For instance, if you opt for contract generation software, it might come with an automated contract review mode and vice versa. Likewise, most contract summary AI tools will include the contract generation and review functionality.
The same goes for the features listed below – they can be found not only in contract summary AI but other contract AI tools as well.
Once your PDF contract is fed to the system, optical character recognition tools embedded in the contract summary AI scan the file and turn it into machine-readable text. Unfortunately, not all tools can recognize texts when it comes to images and handwriting. Therefore, when selecting a contract summary AI tool, it’s advisable to thoroughly understand its capabilities and limitations beforehand.
Before the text is further processed, the contract summary AI will ask you to check the handwritten parts and confirm them. Why? As we’ve mentioned earlier, a contract summary AI tool heavily relies on OCR technologies, and the latter don’t always recognize handwriting correctly.
Because GPT (yes, contract summary AI is based on GPT technology as well) can’t process texts bigger than 3000 words (GPT 3.5) and 25000 words (GPT 4), some contracts might be split into sections to be analyzed separately without overloading the system.
After the text has been recognized and divided into separate parts, its segments are further stored in vector databases. A vector database not only provides efficient storage and data retrieval but also offers quick search functionality so you can quickly navigate through multiple contract parts.
Further, contract summary AI applies NLP algorithms to create a summary of the document (technologies like Azure Open AI are often utilized for this purpose). The summary would often include data points like parties involved, responsibilities, key terms, clauses, effective dates, and critical milestones.
The last step includes the tool evaluating the text clarity and accuracy with a two-step validation process. First, a similarity algorithm is applied, and if the similarity score exceeds a predefined threshold, the summary is considered accurate. Meanwhile, the second step is often optional as it involves users checking the document and whether it makes sense to readers. You can omit this step and fully trust the machine or check the summary to ensure it has structural and linguistic clarity.
Most contract summary AI tools are designed for processing individual documents. So, when it comes to the company’s archives or large-volume documents, the system might be difficult to use, and instead of feeding the entire archive at once, you’ll have to process each contract separately.
Sure, most contract summary AI tools will process the handwritten parts, but the question is – will it be seamless? Currently, this step requires the user’s manual check and confirmation for higher accuracy.
With sophisticated NLP algorithms and vector databases, the chances of the system presenting false information are low. Still, they may not always capture the nuances or context, hence offering results with errors and omissions.
The efficiency of contract summary AI tools heavily depends on the data they’ve been trained during the development stage. If the data wasn’t highly relevant and didn’t include a broad spectrum of contract types or legal language variations, the tool’s performance might be compromised.
Brokers have a lot on their plate when it comes to document management, specifically documents like:
Other than that, property managers can easily generate and review other documentation like security deposit records, insurance documents, and financial statements with adherence to legal requirements.
Other documents that real estate investors can manage with contract AI software include loan agreements, annual reports, tax documents, offer letters, and others.
Order a complete checkup of your software project involving a deep analysis of its technical architecture, design, processes and procedures.
Type: AI contract analysis
Juro’s legal AI assistant is a contract analysis AI tool developed for legal, HR, sales, and finance teams. Users can set guardrails and conditions to generate terms and clauses in a chat-like manner with commands like “Please draft me a termination clause for “name or type of the contract”. And if you like the result, you can press the ‘Insert’ button, and the contract will include it.
Users can scan documents for further risk assessment (for instance, if the document is arranged according to South Dakota laws instead of New York ones, the tool will detect inconsistencies). Further, users can summarize contracts in different formats and negotiate them in real time with Juro’s collaboration platform.
What about the drawbacks? Though most users rated Juro 5 out of 5, some notice poor comment traceability and document duplicates. Others suggest that Juro should add more visibility on how long the client views the contract.
Our wrap-up: Can we suggest Juro for contract management to real estate professionals? Absolutely! First, we’ve found out that real estate giants like WeWork use Juro to manage their contracts. Second, Juro takes into account each step of the contract lifecycle management: you can generate contracts with Juro’s template editor, keep control of contracts from draft to signature, review them in real time, and get contract reminders.
Type: Contract analysis tool for risk assessments
The household name for the #1 eSignature software, DocuSign has introduced a new product – DocuSign Insight or AI for contracts – positioned as an AI risk assessment tool. The contract analyzer is built on machine learning, natural language processing, and rule-based logic.
With automatically created searchable index of all agreements extracted from multiple company’s systems and stored in one place, users can get better document visibility, easily find & filter documents, and conduct comparative AI contract analysis.
What are the drawbacks? Most users rate the tool 5 out of 5. However, some of them say that there is no bulk document submission in the basic package and the pre-approved clause library should be reviewed. Others suggest that it would be great if the tool could resend documents to users who have missed reviewing them.
What is our wrap-up? DocuSign Insight lacks contract summary and contract generation functionality. It is perfect for businesses that have to review agreements daily, conduct comparative analysis (for instance, compare clauses across multiple contracts – you can view contracts side-by-side), and analyze documents – you can visualize data with customizable report dashboards.
However, we don’t recommend the tool to businesses whose operations heavily rely on document creation from scratch and summarization.
Type: Artificial intelligence contract analysis
Another 5-star contract analysis AI tool designed to simplify document management with automated summaries. The company claims that Summize users speed up contract reviews by 85%.
An all-in-one solution, the tool offers ‘Legal Frontdoor’ where commercial users can enter conversations with chatbots integrated with Microsoft Teams and Slack and build contracts by using pre-approved templates and answering questions.
If the user needs legal advice, they can form a request, and it will go directly to the legal team. Yes, you can create and track tasks as well, build summaries and share them with others.
As a contract analysis tool, Summize offers flawless risk assessment, highlighting areas that need to be improved – and everything is done in a ‘Microsoft Office’ style which lawyers are so used to working with.
Are there any drawbacks? We were pleasantly surprised to find out that Summize has the lowest number of negative reviews on tech review platforms. The only tiny drawback is that moving a contract internally from Requests to Repository is impossible.
Our wrap-up: Summize seems to be the best software that is easy to set up and use with its chatbot functionality, which is great news for non-experienced tech users.
Suffice it to say, Summize has all contract AI functionality required for efficient document management – generation, summarization, review, and negotiation.
It integrates with Teams, Slack, and Microsoft Office – so if you’re using these tools already, you’ll obviously benefit from Summize. You can also share the contracts with stakeholders via a read-only link. And it also integrates with Salesforce – so, if you’re a real estate company using this platform, definitely try Summize.
Year: Around 2021
Type: Contract review AI tool
Legly is a contract review AI tool that helps businesses organize and analyze their contracts.
The process is simple. You feed the document to the contract analyzer and wait till Legly identifies problematic clauses, and if some clauses are missing – you’ll get notified. Let’s say there is liquidated damage in the contract. The system will identify it and provide you with an area where you can type in commands like ‘Please remove them’, and the tool with delete them in this case. Or if there is a non-solicitation clause that should be edited, you can type in commands like “Please take out the two years.”
After you complete the review, save the document, upload it and share with others if needed.
Need to analyze your contracts? Use Legly dashboard for that purpose.
Are there any drawbacks? Since Legly represents AI startups in real estate, it hasn’t got many users to explore the tool and leave comments. The only drawback mentioned is that the free version of the tool allows users to conduct 2 contract reviews.
Our wrap-up: Due to the lack of data on the tool’s efficiency (again, Legly is a startup), we can only base our opinion on the tool’s presentation and a few users’ reviews. The first thing to outline is that Legly is strictly a contract review AI tool, so if you’re dealing with contract generation and summarization daily, better switch to another contract analyzer. But if you need a contract AI review tool solely – opt for Legly. With its user-friendly design and straightforward functionality, Legly will be a valuable addition to your toolkit.
Year: 2001; introduced Imprima AI in 2021
Type: Contract summary AI
Driven by AI and machine learning, Imprima offers automated document summaries for AI powered contract management.
Choose the items from the list that should be mentioned in the summary (the tool offers 35 pre-set fields like “lease space,” “signing date,” “extension period,” “price,” etc.). The field with definitive values (items from the list you’ve chosen) will appear in the right part of the screen right beside the open document. You can press the values in the list to locate them in the document, assign different values to text parts, and add new values.
Once you’re happy with the summary, you can confirm to train the AI, so the tool gets more attuned to your contract management processes.
You can also filter the documents based on aspects like price and end date and export results to Excel.
Other than that, Imprima can paraphrase clauses during contract reviews and help you generate visually appealing reports for your clients.
What are the drawbacks? Some users report non-user-friendly interface.
Our wrap-up: Imprima is a contract summary AI that focuses narrowly on real estate. When it comes to documentation, Imprima’s Smart Summaries’ AI processes real estate lease agreements, software license agreements, and mortgage/loan contracts in any language and in any jurisdiction. So, yes, we definitely advise you to add Imprima to your company’s toolkit.
There is no such tool as perfect contract summary AI, but we believe that Ascendix has accumulated enough expertise and proptech development experience to help you try to create one.
Since 1996, Ascendix has been a pioneer in business automation, actively involved in the real estate industry for over two decades. We’ve been closely following the development of AI from its inception and have cultivated expertise in proptech development to help real estate companies upgrade their business operations with state-of-the-art technology solutions.
How can we help you with contract AI adoption?
Contract summary AI is a solution that combines artificial intelligence with natural language processing for automatic summary generation of complex legal contracts and agreements in real estate like purchase and sale agreements, lease agreements, construction contracts, and others.
Contract AI in real estate is used for managing documents like non-disclosure agreements, sales contracts, or lease agreements, and mortgage/loan documents from initiation to renewal or termination.
Contract review AI tools that are currently on the market are Juro, DocuSign Insight, Summize, Legly, and Imprima. Currently, there are around 60 contract review AI tools globally that perform reviews in a matter of minutes.
Tania is a fan of technologies and an expert in writing about them. In her content, she shares insights into new trends and proptech solutions in real estate that can help your business thrive while keeping your customers content (pun intended).
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