Abstract

The two primary characteristics of real estate assets are their heterogeneity and immobility. Because of these two factors, the market for buying real estate tends to be illiquid, localized and highly segmented, with privately negotiated transactions and high transaction costs due to the involvement of a vast amount of trusted third parties (Ling & Archer, 2013). Because of these characteristics, and the opportunities Blockchain offers, the buying process of commercial real estate, and the involved stakeholders could be affected majorly by this technological phenomena. The lack of transparency, high transaction costs and the need for digitalization in commercial real estate companies give Blockchain its game-changing potential. The results have shown that the pre-marketing phase and due diligence phase are most suitable for the implementation of Blockchain. This due to the characteristics of the phases, characteristics of the stakeholders and the characteristics of Blockchain. The main aspect here can be focused on the added value of Blockchain as a data sharing program which could add value creating a more safe and secure way of sharing data. What should be mentioned is that the technology is in an early stage of development and therefore not (yet) suitable for the implementation in the real estate sector. Although multiple pilots and user cases could be mentioned, the technology needs to overcome some obstacles to be a beter success in the current buying process of commercial real estate.

Highlights

  • The potential and influence of Blockchain on this buying process can be described by the story of Maka de Lameilleure, head of research and development at the Antwerp Management School (Straub, 2018)

  • She is telling that the Land Registry of Georgia has been working with Blockchain for about a year and that the notary in this buying process only was involved in the validation of the inserted documents

  • This research intends to provide insight into the technological trend Blockchain with the deliverance of this description. It has been examined whether this trend can offer added value in the purchase process of commercial real estate

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Summary

Introduction

The potential and influence of Blockchain on this buying process can be described by the story of Maka de Lameilleure, head of research and development at the Antwerp Management School (Straub, 2018). She was told that her Georgian parents wanted to sell their house to her. Because the notary only validated the documents, the total transaction costs were estimated on €162 The change of this way of working resulted in a major cost reduction. Christian Luyten, communication director of the Notary Federation of Belgium, recognized the impact He stated: ‘Notaries in Georgia have contributed to the switch to Blockchain. We might lose some revenue due to the implementation of Blockchain, but we could earn more money due to the better focus on more complex dossiers’ (Straub, 2018)

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