September 11, 2021

Why Property Sale and Purchase needs to be digitalized

Throughout time the process of sale and purchase of property has been going on. The process evolved with time, for instance, in ancient times, the process took place by exchanging properties, and sometimes with animal or other valuable goods. As the time changed, many alternate means of transaction came up. The sale and purchase involve having an agreement in the form of legally valid document that shows the terms and conditions at which the buyer and seller agreed upon, which makes this document of great importance. This agreement lays up the agreed-upon terms of the transaction, provides a number of critical safeguards for all parties involved, and establishes the legal framework for the sale to be completed. As the transaction takes place it is important to also record the transaction for warranty purposes. If we examine the question that, why is it important to record the process of sales and purchase of property? The answer to this question is very simple, records are important to ensure the transaction and prevents unlawful harm to the property.

Back in the days, the process of recording transaction of property was done manually, which meant if more transactions took place in a day, higher were the chances of human error and in extreme corruptive cases it was easy to manipulate the record for paid benefits, another drawback of manual record keeping was the misplacement of files. Manual record keeping continued for years as people were less inclined towards the use of computer and technology but as technology started to blend with their daily life routine everything was managed by machines. People of the current generation prefer using computers for their daily activities which highlighted three major benefits, one of them was there were lesser chances of human error, second reason was the computers are a neutral machine as they have no interest in benefits yet no chances or manipulation in the documents and the last and most important reason is that the records can be stored for years with backup so that data cannot be misplaced.

Many businesses have flourished since then as a result of the change of their basic principles. The real estate industry is no exception to this rule. Real estate has begun to use digital technologies into its daily operations. With nearly everyone moving away from traditional means of doing things and toward the more accessible digital world, real estate is undergoing fast digital revolution.

Meaning of Digitalization

The term digitalization means to create digital documents of immovable property records. The fundamental goal of digitizing land records is to give a comprehensive list of property owners, from their ancestral till current ownings.  Pakistan is one of the many countries with internet connectivity, and virtually everyone, regardless of where they were born or where they live, possesses a smartphone. So, if every industry wants to contribute to Pakistan’s digital progress, there’s no better way than digitizing records and digitally mobilizing the workforce’s responsibilities and activities. Furthermore, digitization ensures easier access to information.

Emergence of Digitalization

Due to rise in Covid-19, almost every business was forced to switch from manual system to digital one for the sake for safety. Digitalizing property related transactions and information helped many citizens with convenient proceedings of assets, apart from this many overseas citizens have had the advantage of expediency in purchasing or selling their property with a no fraud involved undertaking.

Transactions that mainly involved land in backward areas faced much backlash due to manual system as many research states that some of the Patwaris, local land recordkeepers preferred being bribed to grant entitlement of the land and many of the people were not in position to offer them with unfair payment, for they needed a completely fair, transparent and efficient land administration system may help put an end to years of insecurity and offer a stable source of income. This gave rise to the emergence of digitalization of recordkeeping in transaction of property.

Easy Digital Documentation of Transaction

Purchasing a property that has error in its manual documentation becomes much frustration if you are an overseas citizen, or in another city. But with digitalization, there are software and automated tools which provide digital purchase or lease agreements that can be certified by authorities in a matter of seconds.           

Increased Revenue by Digitalization?

the Federal Board of Income (FBR) to generate more revenue by means of digitalization as it will be capable of collecting the taxation on property more efficiently and accurately while also bringing Pakistan closer to the real estate industry.

Use of Blockchain in Digitizing and Real State

Blockchain technology has been in the market for decades, but real estate companies have just lately begun to grasp it. It is known because of its protected and autonomous system that can be used to manage transactions, property data, and client profiles, it has a huge potential to impact the real estate industry positively. In the process of transaction in property, blockchain can be used to track all phases of transaction and verify them. Blockchain has boosted much potential in the field of real estate in Pakistan and has promised to usher in a revolution in the industry.

Since 2016, Sweden has been merging real estate with blockchain and the result were much benefiting and satisfactory. Blockchain in Pakistan will be boosting some of the following aspects,

  • Smart contract – With lesser involvement of human beings, the machine itself will generate a contract based on details of the property for the two parties for agreement purposes. Each of the involved individual will have transparent and complete information about the contract, hence no chances of fraud or data manipulation.
  • Fractional ownership – With the changing economic conditions of the people, much stress has been exerted on dividing a piece of land into smaller units, making almost every individual worthy enough to own them.
  • Seamless transaction experience – The main concept behind blockchain was to provide customers with a method to ease their transaction experience. When there is no involvement of agents so extra fees is reduced from here.
  • Linkage of previous record with new – With the use of this technology, it is now easier to add newly purchased property in the history or previously purchased properties and with every future transaction.
  • Quick transfer of ownership – With blockchain handling every piece of necessary information of transaction, transfer of ownership deed quicker and easier.
  • Lesser Disputes – With the whole process being automated, the number of property disputes has decreased.

As Pakistan’s real estate market expands, issues such as land title, registration, access to data, contracts, and transparency are becoming more prominent. Blockchain technology has been used in a variety of ways all around the world. Pakistan should begin looking to promote future innovation in blockchain technology, as the process provides the safe administration of land records and the efficient selling and acquisition of property.

Digitalization is Pakistan’s the largest and most urgently required initiative to modernize the governance system, which speaks well for investors, particularly for Pakistanis living abroad who have been anxiously awaiting the digitization of government and taxes systems. E-governance provides citizens with a forum to report corruption, as well as convenience and less engagement with government officials. This helps investors to participate without wasting time and money in the start-up of their businesses in Pakistan. Relevant authorities have been permitted by the federal government to conduct a digital survey of real estate sales and purchases in the country, which would give residents with simple access to all real estate information.

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