So let’s say you’ve put your house on the market, and you’ve got a great offer of $180,000. But that’s not all you have to pay. In addition to a bevy of legal and paperwork fees, you’ll also have to fork over a commission to your realtor and your buyer’s realtor, typically amounting to 3 percent of the sale value for each. For a $180,000 home that’s $10,800. Suddenly you’re not making $180,000 off your property–you’re making $169,200 instead.
Where does this high commission come from? There are about 2 million active real estate licenses in the U.S. right now, which means if you’re looking for an agent to help you buy or sell a property, you’re drowning in choices. Picking the right agent in this sea of candidates can be difficult, requiring rounds of interviews and hunting for word-of-mouth recommendations.
Though there are many agents out there, there are also many property sales occurring every day, which means sales-per-agent rates nationwide are quite low. Nerdwallet reports that the average real estate agent only sells four homes per year. In such a crowded market, most agents are fiercely competing with each other for only a handful of sales, which means a huge percentage of their annual budget goes to customer acquisition.
High costs and low revenues are passed on to sellers in the form of high commissions, but it doesn’t have to be this way. In fact, commissions are much lower in countries outside the US such as Sweden or the UK, where industry groups like the U.S.’s National Association of Realtors hold far less sway.
Deedcoin is offering a new ICO for a dedicated cryptocurrency that could change the real estate industry. Sellers using a Deedcoin agent (a select group who have to apply to the platform) can pay that agent as low as only 1 percent of their home’s selling price in cash — which would be $1,800 for the example above. The other 2 percent typically added to the selling agent’s commission is instead paid in Deedcoin, with 10 Deedcoins equaling 1 percent of the home’s value.
If the buyer is also using a Deedcoin agent, then that 1 percent value in cash can be split between the two agents, and the Deedcoin used is recycled back into the platform. And if a buyer is using a Deedcoin agent to buy from a non-Deedcoin seller, they can use Deedcoin to cash out a rebate of whatever commission remains after their agent takes a cash commission of, again, only 1 percent of the sale value. As Deedcoins are currently selling for only $1.50, the savings of replacing cash commissions with them are obvious.
Obviously, Deedcoin benefits buyers and sellers. But this ICO will benefit high-quality real estate agents, too. Deedcoin retains a select group of agents only in numbers needed to serve an area market (and they serve markets in all 50 states). Because Deedcoin agents need not compete with each other for clients or advertise much beyond their public listing on Deedcoin’s agent registry, they can attract and serve far more customers per year while lessening or eliminating the time and energy spent on advertising and customer acquisition.
At the same time, Deedcoin’s creators know that the savings the coin generates could become negligible if Deedcoin’s value goes too high. It’s feasible that sellers and buyers who didn’t buy Deedcoin at a lower price might spend as much acquiring it on the exchanges as they would by simply paying a standard commission.
That’s why Deedcoin has also built in an Alpha Formula, which activates when Deedcoin’s average market price is $120 or above. This formula allows people actually using the tokens for real estate to use them at better exchange rates than 10 Deedcoins per 1 percent of sale value. This formula ensures that the utility value of Deedcoins on their native platform will always be more than their exchange value on a foreign platform.
Cryptocurrency is being lauded as the financial tool of the future–to the degree that some industry voices are starting to wonder if it’s getting overhyped. But beyond stories of fortunes made and lost overnight, useful financial applications for blockchain are being developed by companies like Deedcoin.
Deedcoin’s usefulness gives it sustainable utility, making it a safe purchase for crypto enthusiasts. But beyond that, Deedcoin helps its owners participate in one of the basic elements of the American Dream–buying and selling property. About 5.6 million homes changed hands in 2017, with more to come for 2018. If you’re one of the millions of Americans who might buy or sell property in the immediate future, Deedcoin is a solid option for savings.