BLOCKCHAIN POWERED REAL ESTATE
According to a 2015 World Economic Forum survey of 800 executives and information and communications technology sector experts, 57.9 percent of the respondents believe that 10 percent of the global GDP information will be stored on blockchain technology by 2025. Until recently, blockchain was known more as the technology powering Bitcoin. However, industry players now realize that blockchain-based smart contracts can play a much larger role in CRE, potentially transforming core CRE operations.
With that said, the real estate industry is poised for a technological leap forward that will deliver immense value to key stakeholders – buyers, sellers, mortgage lenders and government registries. There is huge scope for increased efficiencies because the basic steps for concluding any real estate transaction are repetitive, documentation is standardized, the closing process which runs on hard copy documents is antiquated, and the number of parties involved in any transaction is vast.
CPROP’s blockchain-powered workflow management system is a planned integration with property portals around the world to help deliver an unprecedented level of trust to real estate transactions while increasing their revenue opportunities. For property buyers, CPROP aims to remove anxiety associated with long-distance transactions by providing blockchain authenticated documents, smart-contract escrows, process automation and options to choose user-rated service providers.
Due to inherent inefficiencies in today’s transactional real estate, transaction costs can reach 10% or more of the total transaction value and the time required to complete the process can be very long, even excluding the time required to agree on a transfer price. And due to the large sums of money involved, the potential financial downside associated with a flawed process, including post-closing property registration and mortgage documentation, is huge.
These pain points are especially evident in cross border transactions which can suffer from a lack of standardization, lack of transparency, mounds of paperwork, risk of fraud, errors in public records, and a host of logistical challenges associated with getting buyers and sellers together.
PROLONGED TIME TO CLOSE
When all parties are unable to see where the various bits and pieces of a transaction stand at any point in time, communications are inefficient and critical path items can go unseen. oticed resulting in unnecessary delays
The buyer and seller may need to be in the same physical location to sign hard copies of closing documents creating potential logistical challenges and added cost for long-distance transactions
UNTRUSTED SERVICE PROVIDERS Buyers acquiring property long-distance need to find local service providers in whom they can trust to competently represent their interests
PAPER PROCESSING The reliance on hard copies leads to risk of documentation errors and a more time consuming, cumbersome and expensive closing process
LIMITED PROPERTY PORTAL REACH The services provided by existing property portals are generally confined to providing listings and their market reach is limited to the extent they are not integrated with property portals in other geographies
CURRENCY The buyer may experience difficulty accessing and paying the purchase price in the seller’s currency of choice, or may wish to pay with crypto currency