Problems and Solutions for Real Estate Reservations
Security of earnest money deposit
Buyers fear losing earnest money that they have to transfer to unfamiliar owner or third party when concluding property reservation agreement without participation of notary or attorney.
Solution
The PrepayWay platform allows clients to draw up reservation agreements and deposit earnest money. The release of the deposit is initiated by the smart contract only upon confirmation of notarial transaction. If the property is not as described, or the deal falls through the fault of the seller, the earnest money is automatically returned to the buyer. In case of dispute, an independent mediator and/or arbitrator from the SmartArb Institute decides the case.
Understanding foreign agreements
Buyers find it difficult to fully understand the content of foreign language agreements, to ensure that all provisions are legal, and to perform due diligence. Independent translator’s and lawyer’s services are costly.
Solution
Buyers can draw up and customize agreements in their preferred languages using our user-friendly system and country-specific agreement templates developed by local lawyers and notaries. Detailed explanation of terms and conditions, unusual clauses alerts and suggestions are also provided. After signing a clear and fair agreement, the buyer can confidently transfer the deposit to partner escrow account.
Complexities with banker’s checks and lockboxes
In some countries, banker's checks and lockboxes are used for property payments. This requires the personal presence of the buyer and makes the process lengthy and expensive.
Solution
Once the buyer transfers the deposit to a partner escrow account, the transaction record is entered into the blockchain, and no one can access the funds or alter the contract terms. The terms for release of the funds are coded in a smart contract and are executed automatically upon completion of the notarial transaction.
Security of booking deposit
To secure a holiday home or any short-term rental booking, tenants must pay a hefty booking deposit for a property they have never seen. Many worry about losing their deposit in case something goes wrong.
Solution
PrepayWay gives the tenant peace of mind since the landlord receives the booking deposit only after the tenant gets access to the property and finds it in conformity with the terms. We offer dispute resolution services by independent mediators and arbitrators from the SmartArb Institute.
Understanding foreign lease agreements
Misunderstanding of the terms of a lease agreement drawn up in a foreign language according to unfamiliar rules and regulations is bound to have negative consequences and may even lead to litigation. Besides, it is important to ensure that all provisions are legal.
Solution
The PrepayWay platform offers country-specific agreement templates developed by local lawyers and notaries in local languages. Detailed explanation of terms and conditions, unusual clauses alerts and suggestions are also provided. After signing a clear and fair agreement, the tenant can confidently transfer the deposit to partner escrow account.
Getting the commission
Real estate agencies receive commission from sellers only upon completion of transaction. Some worry about receiving their commission, especially when dealing with foreign clients.
Solution
On the PrepayWay platform, the agency fees are locked into smart contracts on the blockchain. This ensures that the commission is automatically transferred to the agency upon completion of the transaction.
Time and place constraints
Real estate agencies often rush foreign clients into a buying decision before returning home from property viewing trip. Clients feel uneasy about signing poorly understood agreements under pressure. Many deals are lost this way.
Solution
Our reservation and purchase agreements - fair, balanced, and compliant with applicable laws and regulations - can be drawn up and forwarded to client for digital signature at the time and place of client’s convenience.
Global partnerships
Many real estate agencies are keen on working with overseas agents and growing their global partner network in order to offer overseas properties to their clients. However, brokers don't know whether they can trust their overseas partners.
Solution
PrepayWay vets real estate agencies before they become partners. Our system facilitates flexible referral agreements between RE professionals. Terms and conditions are coded in smart contracts on the blockchain, and the client referral fee is disbursed automatically when the client uses the PrepayWay platform for real estate reservation.
