Can Digital Technologies Speed up Real Estate Transactions?

Can digital technologies speed up real estate transactions?", Journal of Property Investment & Finance, Vol. ahead-of-print No. ahead-of-print. DOI:10.1108/JPIF-09-2019-0131

35 Pages Posted: 16 Jun 2020

See all articles by Andrew Saull

Andrew Saull

Research Associate

Andrew Baum

University of Oxford - Said Business School

Fabian Braesemann

University of Oxford - Saïd Business School

Date Written: May 21, 2020

Abstract

Purpose. This study presents a structured investigation of the most important causes for delay in com- mercial real estate transactions. It assesses the potential of digital technologies such as ’Blockchain’, ’Property Passports’ or ’Automated Valuation Models’ to make transactions faster and cheaper.

Methodology. We conduct a focus group interview to identify the individual steps and the parties in- volved in real estate transactions. Subsequently, we discuss the prospects of digital technologies based on semi-structured interviews with real estate professionals and PropTech executives, and a comprehensive screening of technological solutions offered by PropTech firms.

Findings. The lack of a an up-to-date, single pool of standardised property information turns out to be the most critical cause for delay in real estate transactions. However, the most promising technologies to mitigate this problem, in particular digital property passports summarising all relevant building in- formation, face substantial barriers to adoption. The real estate industry has so far not been willing to more openly share data, which is a pre-requiste for the successful introduction of property passports. In addition, the principle of caveat emptor makes a lengthy due diligence process essential for buyers.

Implications. We conclude that industry-wide collaborations are necessary to help major efficiency gaining technologies to break through. Insurance products should accompany property data log books to guarantee the quality of data provided.

Originality. This study considers the potential impact of technologies in the wider context of the complete real estate transaction process. It identifies the major phases of that process and the associated bottlenecks. We gather evidence both from industry experts and PropTech executives and contrasts their views regarding the potential of digital technologies to remove those bottlenecks.

Keywords: Commercial Real Estate, Real Estate Transactions, PropTech, Property Passport, Blockchain, Automated Valuation Models

JEL Classification: K 25, L 85, O 33, R 33

Suggested Citation

Saull, Andrew and Baum, Andrew and Braesemann, Fabian, Can Digital Technologies Speed up Real Estate Transactions? (May 21, 2020). Can digital technologies speed up real estate transactions?", Journal of Property Investment & Finance, Vol. ahead-of-print No. ahead-of-print. DOI:10.1108/JPIF-09-2019-0131. Available at SSRN: https://ssrn.com/abstract=3607233

Andrew Saull

Research Associate ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Andrew Baum

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Fabian Braesemann (Contact Author)

University of Oxford - Saïd Business School ( email )

Park End Street
University of Oxford
Oxford, Oxfordshire OX1 1HP
United Kingdom

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