PropTech: How Blockchain & Social Media are Changing the Property Industry
The property industry is one of the largest global markets with the UK property market alone being worth over £6 trillion. The process of transacting property has not changed much for the past fifty years with the process consisting of estate agents, solicitor, conveyors and mortgage providers.
Unlike many industries such as travel, entertainment, news and media which have changed dramatically over the years with the use of technology, the property industry is still very much lagging behind the curve. Estate agents have tried hard to improve the property transaction process by using technology to create a new type of estate agents known as a hybrid estate agent. An example of a hybrid estate agent is Purple Bricks, who allow you to list a property with them online and then they will do the work to sell your property by negotiating with potential buyers and arranging viewings.
Whilst this may seem like an improvement it is definitely not a solution to the problem. The problems with the process are simple and very obvious, trust me, ask anyone who has sold a property about their experience selling and watch them breakdown and dissolve like sugar in a fine British tea. Also, although Purple Bricks uses technology to improve on the current process, it still follows the same procedure the majory of estate agents follow which is list with RightMove and let them do all the work marketing the property. Doesn’t sound very fair right? So why are you paying for the estate agent when you could do that yourself? Well the reason is you can’t, RightMove was founded by estate agents for estate agents and doesn’t let individuals list themselves… not like Agent Not Needed…but we will get to that hehe.
The whole process is long winded, taking 2–3 months for a property transaction process to complete. To add to that, a seller has to pay fees to the estate agent, fees to the solicitor, fees to the conveyor and then they get to keep what’s left of the money from selling something they owned and most probably worked for many years to earn. To put it into perspective, solicitors usually charge up to £2,000 whilst estate agents usually take between 1%-3% of the sell price, not including the VAT. World wide you have similar and in some cases higher fees such as the 6%-10% charged by US estate agents (realtors), over 4% in Australia and over 6% in France.
Aside for costs, the process itself taking 2–3 months is one of the most stressful. The most common complaints from property renters, sellers and buyers are;
- Bad communication — agent either chased too much or didn’t call
- Buyer or seller felt agent didn’t care about them
- Agent not revealing known property faults
- Agent making promises they could not keep
- Being too pressuring
- Exaggerating property description
- Over-pricing
- Dishonesty
- Agent not having all information required, such as Council Tax or service charges
- Not being able to contact agent
- Agent forgetting who buyer or seller was
- Gazumping
- Agent providing wrong information
Ok ok I hear you thinking, get to the point, so how is blockchain technology and social media changing and improving the process that is clearly a problem. So let me propose an idea… what if you didn’t need estate agents to manage your property sell at all, or the purchasing process for that matter? What if you didn’t need a solicitor or a conveyor? What if you could just handle the whole transaction process yourself directly with the property buyer/seller, keep the extra cash you would have paid in fees and commissions and not only that, have it all done possibly in the same day, or at least in a few days as opposed to months? Doesn
’t that sound like more of a solution and a modernized approach to property transaction? Well we think so too.
Blockchain is a digital ledger in which transactions are recorded chronologically and publicly. Ethereum is an open-source, public, blockchain-based distributed computing platform which has a feature called smart contracts. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible.
With the use of smart contracts and the blockchain, legal contracts, mortgages and land registry data can be all be completed and stored on the blockchain without the need for solicitors. In short, this means that you can complete all the legalities using smart contracts instead of solicitors, conveyors etc. And Agent Not Needed are building just that over the next 5 years in three phases to remove each third party from the process, starting with the estate agents, then the solicitors and then the conveyors. That means that not only is the process simplified and quicker with the reduction of third parties in the middle, but the costs are reduced and security of both buyer and seller and the property asset itself is increased as the blockchain ledger is irreversible and cannot be manipulated. This will also help prevent property and mortgage fraud and reduce the likelihood of human errors in land registry and other. So only one more third party stands in the way and that is the estate agent… don’t worry, we have a solution for that too and it uses social media.
As I previously mentioned, estate agents take high commissions yet what the majority are doing is listing your property on popular property portals such as RightMove who are doing all the marketing to drive traffic to their website in order to find potential buyers for your property. And as I questioned before… why can’t you do that yourself and keep the money in the process? Surely it’s easier to just communicate, negotiate and arrange viewings online similar to how eBay works, with buyer and seller directly without an estate agent messenger taking the message from party to party so that they can say they were involved and need paying? Back in time that may have worked, similar to how you would pay a stranger on a horse to deliver a message for you, but now we have things like email and we also have things like Agent Not Needed.
So what is Agent Not Needed. We are a property platform similar to RightMove but built on the blockchain than removes the need for estate agents, solicitors and conveyors allowing individuals to list their property themselves and transact directly with buyers and sellers. As I mentioned, the removal of third parties will be completed over the next 5 years in three fazes which should fall in line the completion of the HM Land Registry ‘Digital Street’ project, which is to use blockchain technology to improve the land registry process making it faster and more secure. On our property platform, buyers and sellers can communicate, arrange viewing and negotiate offers like adults and then once a sale has been agreed it is completed using smart contracts. Simple, Fast, Secure and the Costs Greatly Reduced.
Similar to RightMove, Agent Not Needed market your property but with more focus on social media advertising. Social media has grown so much in popularity over the years that it’s now more socially awkward not to be on social media than it is to be on it. Also the fact that people like pages and content they are interested in, means that they unintentionally build a profile on themselves making it easier to advertise products and services that they are more likely to like and use. Our CEO used this approach back in 2013 for a fashion company called Krystellie Fashion helping the business go from £50,0000 a year to £1.3 turnover a year using Facebook. It was done so well that the COO of Facebook, Cheryl Sandburg invited him to talk at multiple Boost Your Business events (pictured below);
So with the use of social media Agent Not Needed will target individuals who have the means and interest to purchase a property on our platform and promote the property itself, not just the platform. This will increase the likelihood of a property selling and increase the platform’s conversion rate of turning listings into sales.
So in summary, the future of property is on the blockchain and it’s sales targeting through social media. To catch a glimpse of the property platform of the future, Agent Not Needed, you can visit our website at https://www.agentnotneeded.com at the time of this publication we are weeks if not days away from our BETA version release.
