The Next Wave Of Digitisation
With blockchain technology, a property transaction can be concluded faster, seamlessly and with limited manual intervention – enhancing the overall efficiency of the system
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Technology is disrupting different industries across the world, and real estate cannot be far behind. Already, real estate consultants have moved beyond the traditional ways of prospecting, with the Internet opening up the market in unprecedented ways and taking a lot of the footwork out of finding property options.
As much as 70 per cent of modern real estate consultancies’ prospects are today acquired through digitally-obtained leads. As big data and analytics become more integrated with the property brokerage industry, such consultancies are now ‘cracking the code’ in innovative ways.
If we look at the larger picture of technology use in the real estate business, various new avenues of doing business are going to open up. For example, crowdfunding could emerge as a new way for real estate consultancies to add value both to developers and their customers. One could use the crowdfunding platform to raise small amounts of money online from several donors to finance a developer’s project or venture.
Aggrieved buyers wanting to get their ‘stuck’ project completed may also take the consultancy’s help by setting up an escrow account where the crowdfunded money gets deposited. When the project is completed and a cooperative housing society is formed, it could sell out the extra units in the project and share the profits with all such investors.
Such advances in financial technology will revolutionise almost all aspects of the real estate business in the future. In particular, they speed up the entire transaction lifecycle of the residential real estate business.
Another area where technology comes into the picture in the real estate sector is blockchain, which has all the hallmarks of a revolution in its own right. The underlying principle here is the distribution of digital information in a secure manner – information which can be accessed, albeit with some restriction, but not copied. This will usher in greater transparency, efficiency and accuracy in the Indian real estate sector.
Given the rise of online portals, buyers have easy access to search real estate properties ‘online’. However, the subsequent stages of documentation, past records, due diligence, registration and final closure, pose a real challenge and blockchain technology, the next wave of digitisation, will make this process simpler.
Simply put, after identifying a property, a buyer can access title records, encumbrances, property taxes, etc., from government records. Further, using a passcode/private security key of the seller, a buyer (or his representative) will be able to access all previous property records such as maintenance payments, ownership, etc. Once the property is finalised, the buyer can share these records with the bankers and mortgage can be arranged post a digital due diligence. With digital signatures, payments can be transferred to the seller and the property can be registered in buyer’s name.
With blockchain technology, a property transaction can be concluded faster, seamlessly and with limited manual intervention – enhancing the overall efficiency of the system.
Digitisation of records, implementation of RERA and GST are the building blocks for Indian real estate sector to emerge as a transparent and buyer-friendly one. Implementation of blockchain technology, which is essentially a dynamic database of records offering ‘viewing’ rights to all but ‘editing’ rights only to the owner, will be a big leap forward in the ease of doing business in the real estate sector.
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