The real estate market used to have a solid foundation and most considered it to be stable. A number of investment gurus considered an investment into a commercial or residential property as a safe bet in order to hedge against a volatile investment product. The stable rental income on a monthly basis gave a feeling of high security and stability, where future returns could be easily forecast and accurately predicted.
Today, however, real estate seems to have more problems than solutions, having caused a bubble and the ensuing financial crisis in 2008, and is now seemingly outdated, as old ways of doing things endure while technological advancements skirt the industry, to the industry’s detriment. Before the financial crisis, participants correctly assumed the underlying asset consisted of brick and mortar, but only a few participants questioned whether the tenant or occupier of the underlying asset was able to pay the rent, or able to repay the monthly mortgage. Researching the creditworthiness of a tenant or a borrower was and still is a rather difficult adventure to undertake. So many different intermediaries are involved in every aspect of a real estate activity, and little transparency is given.
There seem to be too many market players involved in a transaction, each benefiting from a lack of transparency that produces massive delays and very high costs. Just think about how many unnecessary market players are involved in such a transaction. There is a seller, his broker, the buyer, the buyer’s broker, the buyer’s solicitor, the seller’s solicitor, a notary, a mortgage broker, a bank, and the surveyor. And all these participants want to earn money by playing on their specialist knowledge, which they don’t want to fully disclose to other players.
In most cases, these participants use software to become more efficient, but the software is proprietary and rarely compatible with what is being used by other players.