'MyBroker' Removing the Parasitic Middleman from Real Estate Transactions in SE Asia

Project Proposals
#1

This project is at the idea stage only, I do not yet have any clue how to implement it but it feels like something that could really work well for NEM and help replace a bad, broken system. Let me introduce the problem as I know it in the Philippines, I am sure it exists in other countries too, but this is the country I know:

A renter is looking to rent a house or a condo unit so he starts searching ads online from different sites, Facebook, Olx, Mitula, Rentpad, and more. Almost every poster he contacts is a broker! And the brokers are…pardon my view on this…they are the scum of the earth. Arrogant parasites that have joined together to control the real estate business in a way that pushes rent costs up every year. They squeeze renters for as much as they can get, and they take huge cuts from owners. And all they do is draw up contracts, entertain viewers, and handle payments. Post-dated paper checks are the most common form of payment that a broker collects. Usually they do everything incompetently, manipulatively, and corruptly. These are people who make a living out of standing in the middle of two parties who want to do an honest transaction and try to manipulate both parties into giving them as much as they can take.

A lot of owners don’t want to deal with them, and a lot of renters can’t stand them. So how easy is it to replace them with a smart contract? Pretty damn easy I think.

I am not a coder. Not even close. But I will just layout the strategy in layman terms. Owner posts property to the blockchain. It gets listed with other similar (For Rent or For Sale) (Location) properties, classified and advertised, accessible to renters who go to the website to seek a rental. Automatic monitored “self-showings” might not happen for a while, with smart lock and web cam, but possible in the future. Owner might have to show the place or get someone (not a broker please!) to show the place.

If renter wants to rent, the details are filled in the app, contract automatically drawn up and notarized. Payments are arbitrated by the smart contract. And so on.

As I said, I am not a coder, and this is just the spark of an idea, inspired by, obviously, my own experiences and frustrations with these brokers.

Would love for anyone with some technical background (or not, doesn’t matter) to chime in with their own ideas about how this could work.

2 Likes
#2

Your idea sounds great, but just a few question

  1. Platform of such existed without a blockchain, but why it did not work out and why would it workout on the blockchain??
    Answer: In my opinion, the owner of the property, would rather pay some fees, so the trouble/hassle is being hands-off and given to the real estate agent.
    E.g : Opening doors/places can be done by the real-estate-agent.

  2. Just my personal opinion, instead of eliminating the middle man, enforce the property agent to use the platform so owner and buyer is able to check all the transactions, cross-checking between both party, so transparency and integrity is hold.
    If you are going after the entire eco-system of eliminating, it would require a huge amount of money and marketing to do so.

#3

Those are good points and thanks for commenting. However, in my experience, the agents don’t hold the keys, the owner does. And every time a potential renter wants to check the property, the agent calls the owner and sets up a time for the owner, renter, and himself (agent) to meet at the location. Unless the owner has given power of attorney to the agent, otherwise the owner is still involved with everything, and most of them don’t give power of attorney. So it’s still a hassle for the owner. And many of the owners also want to meet their renters.

So it’s like this: Agent posts a lot of generic ads everywhere with sample photos, not actual photos, and this is bait for renters, then when the renter contacts him, he gets all the renters personal information and continues to call the renter in the next weeks to setup viewings with lots of owners of several properties, until the renter finds something he likes. Then the agent makes a contract for the owner and renter.

The only real benefit the owner gets is that if the renter has a problem with something, the owner can tell the agent to handle it, but the agent is always calling the owner to get permission for this or that, anyway, so it’s just a kind of buffer between the tenant and owner so the owner can maintain an air of distance. Which can be done with blockchain as well.

All this can be done with smart contracts, smartlocks, and blockchain. (Non-payment after a certain grace period resets the door passcode, things like that).

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#4

So any would-be renter should first fill in a KYC, gets verified, and owner decides to accept the renter. I think this is a great idea. I myself had problems with middleman. I also own a house for rent, and most of my problem arises from scum middleman. I had my house gate padlock and kicked out my middleman. Let’s develop the idea. Let other Nembers do comments. If were good I might knock on my sister’s door and have her help us dev the system.

#5

Here i see only problem with KYC?
How is KYC done? Who does KYC?
Who see this data?
What data would be required for the KYC?

#6

KYC comes in many ways. It depends on what you require to a customer.

For example the renter. What do you require of a renter? What
identification you wish to know to get your trust settled?

KYC is Know Your Customer. Its an online form that you design. So since you
own the unit, you layout what identity you need from them in order to make
your rest secure.

Lets say there’s an app created for this. So any renters who are looking
for condo to rent, they will have to register first to this app (that’s the
KYC). If the condo owner wants to entertain an “applicant” - the renter,
you will review his form, you can contact him directly (no more middleman)
and settle for the fee, advance.

In the “applicant” side, he would also see your profile, your unit, and
every renter wish to know (rent, status of your unit, your mode of payment,
how much deposit you require).

Are you aware of openbazzar? This is an online selling platform that is
altogether free. No middleman is involved, just you and the customer
talking.

So to answer your question one by one:

How is KYC done? Who does KYC?

  • KYC is done online via the system, lets says “rent system”.

Who does the KYC? - it could be both of you depending on the design of the
app. If the system requires that both renter and owner wish to see some
details about them that would make them trustworthy.

Who see this data? Both of you (read only, can not be edited)

What data would be required for the KYC?

  • depends on your requirements (if you are the renter what data would you
    like to know from the owner and his unit?. IF you are the unit owner what
    data would you like to know from your renter? (For me I need to know where
    is he working, what job he has, how long he has, this will establish that
    he can pay long term.)

When we open acct to a bank, we fill out a form - that is a KYC designed by
a bank.
When you apply to CITIbank CC, they will ask you to fill in form, some
photocopy of your identity, some photo copy of your payslip - this is a
KYC. Its scalable.

Now here is the best thing is this will happen and a good programmer will
pick this up, they can put a “Reputation scores” So Unit owners can enter a
reputation score to his renter depending. Likewise, the renter can enter a
feedback about you, and your unit. Are you a good unit owner? Do you fix
broken pipe with delay,…something like ebay style. In this way, both
renter and owner can filter their clients.

#7

Have you seen No Broker - http://nobroker.com … As someone who has rented, and also rents out - it would be great to have a platform that does not require the middle-person. The real challenge though is the pre and post inspections, and if there are issues with the property. For someone who is time-poor, maybe its worth giving 5% to a broker or agent to sort all that out.

So, here’s the thing. For someone who owns a property and is able to rent it - is the 5% a large amount of money?

There are platforms in the US that removes the broker or agent from the equation. But as I said, if you are wealthy enough to own a property, perhaps paying a small commission to manage it isn’t a big deal.

More validation is required in the specific geography you would want to launch this.

Good luck! Best, Sam.