With automated transactions soon becoming the new industry norm, it will contribute to consumer security and reduce the workload that includes writing contracts and overseeing transactions for sales and purchasing.
FREMONT, CA: Software-based proptech companies fail to attract enough venture capital because firms cannot get swift revenue growth. To make money, a new proptech startup in the residential space will need to turn into a mortgage provider, brokerage, or escrow/title company depending on whichever charges the most in transaction fees.
Presently, a new wave of proptech (property technology) is gaining much attention. This trend is on the rise, where real estate meets fintech (financial technology).
The Next Real Estate Tech Trend
In transaction automation, we see that the trend of e-signatures, e-recordings, and e-notarization is becoming the industry standard. The technological improvements on the transaction end will be a game-changer for high-value assets such as real estate. Preferably, if the payment and ownership transfer should happen automatically, there will be no need for trust layers, and real estate could become a part of the e-commerce marketplace. This notion is applicable for real estate as a document states the ownership and not the asset itself.
However, because of the present maturity state of the market and how venture capital operates, the transaction automation remains dormant. Nonetheless, we have recently seen venture capitalists coming to understand the possibility of real estate transaction process and creating job opportunities that support new real estate technologies.
The Potential of Real Estate in the Future
Machine learning and smart contracts modernize the transaction. With automated operation soon becoming the new industry norm, it will contribute to consumer security and reduce the workload that includes writing contracts and overseeing transactions for sales and purchasing.
Using smart contracts based on blockchain technology, the exchange of money and property ownership is possible. Although these contracts do not replace traditional paperwork, they confirm that the connection happens between the digitized paperwork, wire payment, and ownership transfer. Transaction automation will involve some technologies like e-signatures, e-notarization, and cloud solutions and not just blockchain technology alone. These applications will enable the ability to automate the steps within the real estate closing process, making it a pleasing experience when buying a property.
See also: Top Proptech Solution Companies