Residential real estate is on the precipice of change.
Residential real estate accounts for two-thirds of the $217 trillion spent in real estate around the world each year. An increasing volume of this activity involves cross-border transactions.
As technology develops, new segments of wealth are emerging, which drives globalization.
Seventy-five percent of China’s population and 41 percent of India’s population will be considered middle class by 2022, according to research firm McKinsey.
Together, that’s 1.57 billion more people on the planet entering a new tier of purchasing power. However, the global real estate industry is ill-prepared for this coming transition.
Little has changed in the way we transact property over the last 50 years. Multiple stakeholders, data sources, service providers, regulators and government agencies take their slice of the transaction pie as a transaction marches from list to close.
Ask any real estate professional to describe her day, and you’ll hear about the costs and challenges she faces when it comes to listing exposure, data accessibility and transaction delays.
If she wants to list a property that could attract an out-of-state buyer, she is required to subscribe to multiple MLSs to maximize exposure of her listing.
The agent, however, is the individual propagating the data, working hard to obtain the listing — yet she is taxed the heaviest in the transaction process.
While there have been a range of investments in real estate technology in recent years, many agents struggle with many challenges they’ve always had: high costs and restricted exposure.
Before proposing a solution, we need to understand how we got here.
Over the last 30 years, the web has gone through three transitions.
Web 1.0 began in the 1990’s with America Online (AOL). AOL led to an explosion in the average “Joe” signing onto the web. AOL had full control over our data, creating a one-to-many relationship (AOL to many users).
Web 2.0 emerged in the 2000’s with social media. Companies such as Facebook enhanced AOL’s model by enabling consumers to take over content creation. This led to a many-one-many relationship (users to Facebook to users).
Today, we are at the beginning of Web 3.0, powered by blockchain. In Web 3.0, we are establishing a peer-to-peer relationship (many-to-many) without middlemen. In this paradigm shift, users will exchange data directly with each other.
Web 3.0 mechanics
The InterPlanetary File System (IPFS) is a peer-to-peer data distribution protocol that enables this user-to-user relationship.
We can envision IPFS through the process of sending an email.
Using Gmail, the journey of your email today is from your computer to Google’s server to your recipient’s computer. With IPFS, that email will travel directly from your computer to your recipient’s computer (or the shortest possible route).
The blockchain secures this process. Imagine protecting a jewelry box in your home. If someone wants to rob you, they only need to bypass your security system. Now imagine you distribute each garment to a trusted neighbor. Now the thief has to break into the entire neighborhood.
The blockchain (and IPFS) provides the ability for us to create open communication channels between each other.
The public ecosystem is not owned or controlled by a single entity but rather by the community members themselves. With these tools, we can create the first, user-, agent-owned Global MLS, a Web 3.0 MLS.
When people think about blockchain and real estate, they often gravitate toward transaction instruments such as title.
However, data provides an even more immediate opportunity with access to new monetization tools to participants around the world.
Web 2.0 tackled real estate by empowering technology first and the user and agent second. Web 3.0 offers a monumental paradigm shift that will empower consumers and agents with the help of technology.
Imbrex is a global MLS that rewards users and agents for contributing listings and incentivizes the community for curating the platform. Because of the platform’s decentralized, blockchain architecture, users and agents maintain control of their data. Imbrex offers the first cost-effective approach to listing exposure and accessibility, where users and agents around the world can search, view and get compensated for listing data.