Innovating the property transfer process for a more efficient future
As one of the single largest industries globally, the property and real estate sector is arguably the world’s biggest store of wealth. A wave of technological advances has already transformed the industry through paperless, automated systems supported by digital interactions. The sector’s ongoing revolution hinges on finding efficiencies in an ecosystem built on legacy systems and processes, says Clive Bredenkamp, Proptech IT Executive at fintech specialist, e4.
In South Africa, the property transfer process kicks off once an offer to purchase is presented to a transferring attorney. If bank finance is used, the purchaser applies for a loan from a bank, and a bond registration attorney is appointed to register a mortgage bond over the property as security for the bank. The transferring attorney then works with the bond registration attorney to request guarantees for the purchase price and arrange the simultaneous registration of the transfer and mortgage bond. Numerous documents are needed during this process, including bond cancellation figures, rates clearance certificates, levy clearance certificates, and a transfer duty receipt or exemption certificate from SARS. The transferring attorney then prepares the transfer documents for both the seller and purchaser to sign, including FICA affidavits, SARS transfer duty declaration, and a power of attorney to pass the transfer. Only once all documents are in order, are they submitted to the Deeds Office for registration. This simplified summary of the process camouflages the complex spiderweb of communications that takes place among all parties during a property transfer, but it does underscore why solutions and platforms aimed at creating efficiencies have to answer the needs of the entire ecosystem to be truly effective.
The property transfer process was built to transact in very traditional ways, but digital innovation has turned it on its head in almost every respect and has an impact on everything from acquiring customers to onboarding them, from facilitating access to credit to processing transactions, and the way clients are managed through the entire life cycle of the relationship. e4 became the first proptech organisation in South Africa to bring together key stakeholders in the property ecosystem, including buyers, lenders, conveyancers, and sellers, and manage the communication flow digitally to become a seamless, fast and transparent home for a ‘single version of the truth’.
Tried and tested business models in the property sector, both in South Africa and across the globe, are likely to face a host of new challenges brought on by regulatory pressures in the built environment, market demands for increased efficiency, and the expectations of customers demanding a more streamlined digital service through innovative applications and digital platforms.
In short, the property transfer process itself is ripe for more disruption, and proptech innovations have real potential to deliver substantial benefits to businesses and their end customers. Improved efficiency leading to reduced costs are among the most significant benefits of more innovation in the proptech space. In a process often bogged down by outdated, manual methods, automating paperwork and broadening the acceptance of already readily available solutions like digital signatures can cut delays and lower costs.
Enhanced data accuracy and security can be achieved by harnessing technology, which reduces human error and enhances accuracy throughout the property transfer workflow. Advanced data encryption methods provide robust security and privacy, protecting businesses and their customers from data breaches and fraud. Proptech solutions can add tangible value by offering real-time, accessible information on property transactions via transparent platforms that allow all parties to track and verify property transfers with greater ease. This speaks to the need for more transparency and trust as essential elements in a complex property transfer ecosystem.
Streamlining the transfer process provides an enhanced customer experience by reducing waiting times, increasing transparency, and eliminating redundant paperwork. Even the smallest, most incremental time savings can have a significant impact on the financial outcomes for all parties involved. A time-saving of days already has massive cost-saving implications, while reducing a 90-day property transfer process to 30 days would change the complexion of the local property market. As the industry evolves, it is vital that all property stakeholders embrace the digital revolution to reduce costs, enhance accuracy and security, and ultimately provide a better customer experience and competitive advantage. However, there are still areas where outdated systems and processes hamper real progress, and where the full potential of these benefits has yet to be realised.