FinTech can revolutionize real estate sector; here’s how

The property market is transforming, and the adoption of FinTech and PropTech is aiding the process substantially. Fintech, or financial technology, in particular, can help real estate companies in myriad ways, enabling them to increase investment opportunities and cut costs right from property evaluation to the final purchase. It can bring about digital transformation in the property sector, which has been propelled by several factors, chief among them being millennials warming up to homeownership.  

FinTech’s impact on real estate 

FinTech can help all stakeholders in the real estate market, from sellers and buyers to associated everyone in between. Even existing homeowners in the secondary market can benefit, as it enables them to assess their properties using online tools and arrive at the right price. Concomitantly, sellers can advertise more accurately, thanks to the availability of reliable data analysis software. 

Here are some specific ways in which FinTech can prove to be a major disruptive force in the real estate industry: 

Simplifying loans 

FinTech firms can make home loan processes simpler and more straightforward, thus benefiting the supply side as well as customers. Procuring financing is one of the most crucial aspects of a homebuyer’s journey. Oftentimes, potential homebuyers receive loans from banks or non-banking financial companies after a tedious process. With FinTech making inroads into the loan disbursal process, home loan processing can become much simpler and less stressful.  

Doing away with middlemen 

Buying a house is a complex, time-consuming process involving several intermediaries, such as property agents, who will, naturally, demand a sizable commission for themselves for their brokerage services. The adoption of FinTech will enable real estate firms to simplify procedures and eliminate middlemen, thus helping both buyers and sellers. 

Enabling secure transactions 

Real estate deals involve a lot of money. As a result, investors need to ensure that the transactions are safe and transparent. FinTech can help develop tamper-proof databases and processes. For instance, blockchain technology can improve property rights management by reducing fraud in transactions, as it is highly secure, transparent, and decentralised. It also allows for faster settlement times and reduced costs through disintermediation. 

Besides, it can transform how buyers, sellers, and investors interact with one another and their governments, by providing users greater control over their affairs. People can share data directly with the relevant authorities without relying on third parties. Blockchain technology enables lenders to make better loan-disbursal decisions, based on actual data rather than bias or credit scores that may not accurately reflect an applicant’s ability to repay. Additionally, distributed ledger technology (DLT) can be applied to the management of public records, particularly government-held land registry data.  

Offering one-stop solutions 

With the increasing adoption of FinTech in the real estate space, industry stakeholders can expand horizontally as well as vertically. FinTech can provide various services such as leasing, acquisition, and loans under one roof. So, the entire functioning of the property sector can be simplified, streamlined, and secured. This is bound to help companies functioning in the sector attract new investors and buyers.  

To conclude, FinTech has the ability to disrupt the real estate market in many ways. With millennials, who have a greater affinity for FinTech, entering the market in great numbers, the adoption of associated technologies is inevitable. That aside, with so many benefits it can offer, FinTech makes a compelling case for broader adoption by stakeholders across the real estate value chain.  

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