Real Problems, Real Estate
We have been witnessing the greatest era of technological advancements in every walk of life. Everything is slowly becoming automated, and as an Artificial Intelligence enthusiast, I can understand how little of a help will we require from humans in the very near future.
I surveyed a lot of industries and tried identifying where there are monumental gaps in technology that need to be addressed. Real Estate is definitely one of those areas. In most emerging markets, Real Estate technology is a serious issue, and there is not much competition to accelerate growth in the technological sector for Real Estate. A lot of companies are working on providing a front end solution including fractionalization of Real Estate that allows for retail investors inclusion.
In the emerging markets, problems pertaining to the technological advancement in Real Estate are much more fundamental than providing just front-end solutions. Problems start at a legislative level with governments and includes manual processes for completion of transfers of Property Possessions. Moreover, there is a lot of ambiguity in terms of directories of the property owners. Many of the emerging markets still have an analog system for recording these files. The main reason behind the failure of adaptation to technology is distrust in technology for the integrity of data. That problem arises from the fact that there are not enough scientifically or technologically aware people in these industries and government departments. Even in first world countries, the deeds have to be filed with county clerks which is a manual procedure. And a lot of counties in US do not have the online warranty deed search option. Some of them do not even have proper metrics/models to objectify the pricing mechanisms of Real Estate. Most of the Real Estate pricing in developing markets is based on speculation or road-mapping for the entire project. Not to mention the amount of parked funds in the Real Estate and undocumented economy clearly shows the governments lack of competence and ability to understand the mathematical side of markets even with the presence of their consultancy banks.
Information theory can be used to explain the efficiency of the Real Estate market. Ideally, Real Estate and warranty deeds would be exchanged or transferred like stocks with the ability to buy/sell at the click of a button. There is a latency effect in the transfers of property which is caused by the processes using analog methods, red tapping and human intervention for no reason.
Problem is not as big as it seems, and especially with the awareness Blockchain has created in the last couple of years. Blockchain is essentially one of the best solutions that can encompass all of the concerns of the integrity of data and legitimacy of documents. Moreover, the sophistication in encryption algorithms also provides hope for a decent solution to this problem. Quantum encryption being on the horizon is another light for this stressfully analog industry. Smart contracts could essentially eradicate the need for any arbitration or dispute resolution and hold the right parties accountable. I have already expressed in my other articles the need for CBDCs, permissioned blockchains and decentralized blockchains for countries. Being a little optimistic, a blockchain can be substituted for a strong encryption system with enough computational power so that it is tamper proof or does not break. Every country needs to be focusing on increasing the sum total of the computational power they have to automate the data stored as well as facilitate faster through put for government’s legal processes. The total intervention from the government that is required in terms of such processes is to have an open mind and listen to people that can help automate these ridiculously lengthy procedures. Not only are these technologies faster but they are more cost-efficient. There are potentially zero net draw-backs from integrating these technologies, and making life easier for the general public. But wait, such technologies could open the doors to direct democracy instead of the tainted versions of representative democracies that developing as well as developed countries have deployed in their countries.
All of these problems allowed me to focus on the gaps and automating the Real Estate processes. We are starting with objectifying and creating real time Real Estate indices that allow investors to make informed decision. There are many other factors that are being factored in when pricing a property like their social scores, traffic hours, crime rate etcetera. A lot of countries and platforms have already adapted to such metrics to a degree of accuracy. My goal is to help developing economies catch up to the developed economies in terms of Real Estate. An outreach inclusion program combined with right legislation could incentivize a lot of people to carry out transactions in Real Estate through proper channels which in turn would help document the economy. Most of all, the technology we are developing that I am particularly proud of helps the transfer of ownership of properties online between users with the most sophisticated encryption algorithms available in the world.
It would be wishful thinking that governments are unaware of the impact of blockchain or different types of encryption for Real Estate, data integrity and preservation; they are already aware. Or in general about the sum total of computational power a country has for its intra-net. But shifting to such models would mean zero intervention from the bureaucracy; which would not align with their personal interests.
What I picture for the future of Real Estate is fully automated and seamless processes that allow for ownership transfers without any human intervention. It might seem very far fetched that an industry that is highly regulated, irrevocably analog would be at a point where people would be able to buy-and-sell Real Estate with a few taps on their phone screen. All of this is very much possible, and that is the future we are working towards; making things easier for everyone!
