Consultants in the real estate industry play a critical role. today’s real estate asset market price is based on incomplete and limited information and characterized by the following factors: estimates of value made by a relatively small number of experts and bidding carried out by a very small subset of potential buyers within a single or time-limited auction. This increases the lack of transparency in real estate transactions.
Moreover, collecting and collating information on land value, geographical position, rental yield and the business development plan of a specific area often requires a serious level of expertise and privileged contacts.
Even well-capitalized investors who rely on reputable real estate advisors often have to pay high consultancy fees for that advice, which is ultimately based on a single point of view of that particular advisor.
REMARK’s platform overcomes these issues byengaging a network of reputable real estate advisors and consultants, Consultants in Real Estate (CREs). These experts are incentivized to take part in REMARK’s Building Public Offering (BPO) process, and following the BPO, to continue to provide accessible and transparent information to REMARK’s users regarding buildings listed on the REMARK platform.
The Role of Asset Valuation and Our Indexing Methodology
Brickchain’s methodology also relies on hedonic estimates of market trends. Hedonic pricing and indexing methodologies are quite common in real estate and take into account repeated sales, CRE forecasts and building owner’s data.
An index relying on repeated sales requires the collection of at least two sale prices for the same asset in a given timeframe.
The main assumption is that during the holding period of any given asset in the dataset its value compounds at a given rate that is common to all similar assets(by geographic location, typology etc.) being held or sold during the same period.
Given this assumption, our proprietary algorithm is used to estimate the asset value atany period intime. These estimates, coupled with information provided both by CREs and building owners, are the inputs to our index.
This proprietaryindex is highly useful as it allows participants to form opinions regardingglobal trends on assets that share similar features.
The role of CREs and our indexing methodology have been created for the purpose of gaining accurate information from interested parties in relation to an asset with uncertain value. Together, they will provide a trustworthy source of all available information on an asset as well as a real timevalue estimate.An accurate estimate of value will in turn allow the asset to be tokenized on REMARKvia a Building Public Offering (BPO) and subsequently traded as a liquid asset, achieving our goal of democratizing access to real estate investing.