Real Estate Investor Magazine South Africa Dec/Jan 2016/17 | Page 34

TECHNOLOGY

How Blockchain will Disrupt the

Commercial Real Estate industry
Transparency and speed to earn money unmatched
BY NICOLE CRAMPTON

B

lockchain technology aims to create
transparency in the real estate market, enabling
you to avoid the middleman and reduce the
time it takes to earn money from a new property.
Blockchain technology is about to disrupt
the commercial real estate industry. This online
technology will allow you to cut down on time and
costs, between buying a property and earning from it.
Its aim is to enhance transparency in South Africa’s
real estate sector by enabling you to connect directly
with the seller and avoid reams of red tape and
middlemen.
Here are three ways Blockchain technology will
disrupt the commercial real estate industry:

Disruptor 1 – Makes the ‘middleman’
obsolete

Currently, when transacting in the real estate industry
it can be inefficient, opaque and expensive, specifically
due to middlemen, such as:
1 Property brokers with incomplete property
databases
2 Inspectors and appraisers
3 Notary publics.
With Blockchain technology you can by-pass these
middlemen and save on the fees and time spent waiting
to complete the purchasing process. You could argue
that these middlemen currently exist because they
possess information that you can’t access. Or, because
they have skills and licences you don’t have that you
need to operate within the current commercial real
estate environment.
Public Blockchains are databases where anyone,
from anywhere around the world can access record
information at any time, without censorship
challenges and without the need for permission.
This database can then inform you about the owner
of a property you’ve had your eye on. Now you can
approach the owner, offer to buy, or even partner with
them directly.
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DEC/JAN 2017 SA Real Estate Investor

Disruptor 2 – Makes fraud easier to detect

Blockchain technology can assist in fraud prevention
and ensure that documents such as IDs, driver
licences, bank statements, and deeds weren’t forged.
Don Oparah, CEO of Venture Aviator an IT services
and business strategy consulting firm explains: “By
offering a 100% incorruptible resource, whereby the
sender and recipient record their funds, and where
you can save ‘digital ownership certificates’ for
properties, the Blockchain would effectively make
forged ownership documents and false listings a thing
of the past.
The unique ‘digital ownership certificates’ are
almost impossible to replicate, and would be directly
linked to one property in the system, making selling
or advertising properties you don’t own almost
impossible.”

Disruptor 3 – Makes it easier to self-manage

Blockchain has the ability to perform ‘smart contracts’,
which reduce the need for human assistance in
processing and verifying agreements. A software
protocol automates and self-executes an action for
specific conditions.
“Structuring a transaction using a smart contract
ensures that the transfer occurs as soon as the seller
receives their funds, and results in a publicly available,
verifiable record of the transfer. Because the contract
automatically performs based upon the predetermined
rules agreed to by the parties, there is little risk of
fraud, and no need for external measures to enforce
performance of the agreement,” explains Andrew
Hinkes an attorney at US business law firm Berger
Singerman.
This revitalising technology is going to transform
the global, and local, real estate industry by
introducing the cost savings, efficiencies, fraud
reductions and conveniences of Blockchain platforms.

RESOURCES
Standard Bank BizConnect
www.reimag.co.za