Trading a real estate asset is nothing if not laborious. From the decision to sell to actually trading can take months.
There is oodles of paperwork to do, dozens of parties to involve, hurdle after hurdle to negotiate, and many repetitive tasks with each party often doing the same thing, slightly differently.
Imagine a world where it wasn’t so laborious. Imagine a world where the friction is gone and trading, funding and dealing was a smooth process. Sounds like pie in the sky? No, it sounds like Cloudscraper.
Cloudscraper is a new real estate exchange for buying, selling and financing through a unified networked data ecosystem.
Developed by Moses Gottlieb and Martin Sekel in 2014, the firm was officially launched to market in February this year.
It claims to be able to reduce the time it takes to transact and finance property dramatically. To reduce all the friction associated with trading –without removing the middleman.
“Cloudscraper is not an advice system,” says chief financial officer Matt Webster. “It’s a system that allows buyers, sellers and lenders to be able to connect and share information and put deals teams together.
“It allows people to connect, it allows the data to be transferred between individuals. It provides functionality that you don’t otherwise have.
“Brokers still serve a very vital function. They provide subjectivity, they provide perspective, they provide advice.”
Webster, the former global head of real estate finance at HSBC, who joined Cloudscraper in January, was this week’s guest on EG’s TechTalk Radio podcast.
He believes, obviously, that Cloudscraper is the future of real estate trading and that it will replace the “analogue approach” to transacting. But how?
Cloudscraper users can upload information about properties in their portfolio that they want to sell or refinance and share that information with other users of the platform. Potential buyers or funders on the system can log their investment preferences or lending criteria in the system so they get alerted when a property is uploaded with those specifics.
The system has a built-in NDA (and the ability to upload your own personalised NDA) and data room, again removing laborious and timely steps from the transactional process.
The process of finding a lender for an asset, claims Webster, can be reduced from two to three weeks to two hours.
The biggest thing we are fighting against is apathy. But ultimately, with the pace of what’s coming through the marketplace right now, those people are going to find themselves under a substantial challenge going forward
“You have the ability to streamline how the information gets transmitted from one user to the next and make that as seamless as possible,” he says.
“If you can transmit that information electronically, it speeds up that process immensely.
“Even just pulling a data room together you’ve got to go and talk to the data room firm, get the quote, give them the users, get the room set up, get everything uploaded and then you start inviting people once they have signed the NDA. That’s a process that can take a week at least, if not longer.
“With Cloudscraper, because you’ve got that information already on the system and you’ve got the integrated NDA, as soon as you sign that NDA electronically you get access to the data room and immediately you’ve got the ability to have that information conveyed to a potential buyer, lender, you name it.”
Webster says that since coming out of stealth mode in February, the number of users has increased by 50% to 160 different companies based mainly in Germany and the UK.
The firm is now focussing on expanding the system into North America and then into Asia in 2019.
But in a sector where more than $870bn (£630bn) was transacted last year, Webster and the Cloudscraper team have a big job to do if they want to convert real estate transactions from analogue to digital.
“The biggest thing we are fighting against is apathy,” says Webster.
“I’ve seen it in every institution I’ve worked for. You always have people who are suspicious.
They’re comfortable, they don’t want to change, they dig their heels in. But ultimately, with the pace of what’s coming through the marketplace right now, they are going to find themselves under a substantial challenge going forward.”
To send feedback, e-mail Samantha.McClary@egi.co.uk or tweet @Samanthamcclary or @estatesgazette