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This Old House - Do-it-Yourself

How to Save Big on Buying Your Home

Written by Posted On Wednesday, 15 August 2018 14:02

Fees and fine prints

Anyone who’s shopping around for a new home would be silly not to find the best value for their money. The same property can be offered at different rates by different brokers, or even by different agents from the same brokerage. But at the same time, the amount of time and effort it takes to shop around and negotiate deals can be exhausting.

This is because there is an entire web of intermediaries between the property and the buyer--the services buyers are paying for--whether they recognize it or not.

Another common aspect of real estate deals that many neglect to take into account is interest rates. If a buyer is paying on installment, they have to make sure to compute the overall total instead of just looking at the monthly payments; this is simple math, yet many get caught up in the excitement of buying a new home that they fail to see the computations objectively. Those who are inexperienced will find that some properties trump others in the long run in terms of overall cost after fees and interests are factored into the mortgage cost.

Although (arguably) far easier with the internet, searching through the web for the best properties and the best deals can still be a daunting task. But what most do not know is that there is a new development brewing that spells good news for real estate buyers and brokers alike. The world is transitioning to a higher level of digitization; from the internet, we are transitioning into everything being “blockchainized.”

Luckily, this shift is also making its way into the real estate industry.

New real estate marketplaces: things are about to get cheaper

Real estate hunters need not worry about understanding the blockchain’s technicalities to reap the technology’s benefits. The main thing real estate buyers should know about implementing blockchain technology into the real estate industry is this: everything is about to get cheaper.

It started out with a few property owners selling their real estate in exchange for Bitcoin. But blockchain technology has far more significant implications than that, and some start-ups have risen to turn those possibilities into reality. New real estate marketplaces are opening up online and are powered by blockchain technology.

The best thing about this is that these new platforms will not be alienating at all, but instead will look very much like the websites consumers have gotten used to throughout the decades—except with better features. The main differences are under the hood.

How much can you possibly save?

A few notable start-ups are working on putting real estate property on the blockchain, and the results are favorable for everyone involved.

One notable start-up is Deedcoin, which consolidates all the available properties up for sale into one platform where buyers, brokers, and sellers all coordinate; this cuts down significantly on processes and middlemen, along with the costs they entail. The time and effort users have to put in for every deal is streamlined, and because everybody’s job is made easier, everything becomes cheaper.  

This level of digitization makes transactions far more efficient. Deedcoin has brokers in 161 cities in all 50 states in the US, plus Puerto Rico. They have a map where buyers can conveniently locate brokers for each state. For those familiar with full-service real estate brokerage Redfin, Deedcoin is a better, cheaper version. Traditionally, commission fees for properties would be somewhere around 6%. Deedcoin can drag this down to a whopping 1%; For every 10 DEED tokens, 1% is slashed off the property price.

For example, a property that sells at $100,000 including a 6% commission could potentially only cost $95,283. That’s almost $5,000 in savings.

So for those looking to buy real estate in the near future, blockchain-powered real estate marketplaces are worth trying out. Afterall, the savings you’ll receive will be better off being spent on furnishing your brand new home than on commissions.

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