By Invest-Gate Managing Partner Mohamed Fouad
The real estate sector seemed always a bit conservative, mostly unresponsive to innovation. Just a couple of years back, not many countries had a digital public ledger of properties. With time, digital solutions are firmly taking bit by bit over in the property business, particularly as the rise of the pandemic COVID-19 ensues need for social distancing, cleanliness, and minimal contact, and changes the role of technology from nice-to-have into a must-have.
Nowadays, the conservative image of this pen-and-pencil industry is shifting and all the parties in this game realize that new cutting-edge technologies will breathe new life into it. Better yet, it appears that innovations in this segment of the economy are coming to simplify the lives of buyers, homeowners, and other market participants alike.
In the era of face masks, with walk-ins and in-person tours losing traction, one of the most mentioned technologies seeing widespread use and indeed changing much of the face of real estate deals is, in fact, one of the simplest: virtual walkthroughs/meetings.
Lately, this consumer-grade technology has become a staple of home shopping, wherein agents effortlessly get in contact with potential buyers via teleconferencing software such as Zoom Video Communications and Facetime. Essentially, they get to share screens, go over data and analytics, close on desired properties.
Beyond that, realtors are also embracing TikTok for virtual showings and even hosting virtual open houses through Facebook Live, allowing homebuyers to conduct in-person visits to over two dozen places electronically. These virtual 3D tours, according to market experts, are accelerating the existing property search, with customers winnowing down the list of potential real estate faster than eve.
Meanwhile, in Egypt, there is a limited number of websites available to showcase real estate properties online, namely Aqarmap and Property Finder, which indeed disputes the adoption of the virtual sales concept countrywide.
Therefore, companies should work on building strong websites/platforms and creating virtual tours that are as vigorous and influential as mockup showrooms. Consequently, sales can seamlessly take place, just pending the Central Bank of Egypt (CBE) approval on the online transaction.
While most of the home-buying process – from negotiating to contract agreement – can be carried out electronically, yet for a major life purchase like a home, the tactile experience is still important. This is because customers typically prefer to feel, touch, and eyewitness prospective properties.
But the real challenge Coronavirus poses to real estate deals, is not shopping for property – it is closing on one. Many documents in the purchase closure require a notary, and notarization is normally done in-person, especially in Egypt; even closing on a mortgage entails face-to-face paperwork.
Speaking of the North African country, Egypt, this issue can be addressed by installing an electronic public ledger of all real estate units nationwide, backed by blockchain technology, which will offer visibility to all participants and allow for deals to automatically close using smart contracts, hence eliminate the need for third-party intermediaries.
From conducting due diligence to enabling crowd-sourced investments and more, blockchain makes way for designing rental and purchase contracts, providing and evaluating the necessary data for real estate valuation, commissioning service providers along the value chain, mapping out property data, and storing sensitive information.
However, the impediment to blockchain adoption in Egypt is not quite technological but
rather juridical; legalities should be revisited to facilitate financial transactions in the longed-for blockchain-backed real estate sector, which will, in parallel, contribute to the development of the economy as a whole.
The takeaway regarding the current business climate seems to still heavily revolve around the air of uncertainty. Despite the early stages of the pandemic’s lifespan, all markets have already experienced severities, and the Egyptian real estate industry – like any other – will certainly pivot.
That being said, as so much of the home-buying process can be resolved or substituted via digital channels, it means that the global health crisis may actually induce a seismic shift when it comes to how real estate agents adopt (and flourish in) the new technological wave – and harness it to their advantage.
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