Can Digital Technologies Speed up Real Estate Transactions?

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