How is the Blockchain Technology Disrupting the Real Estate Industry
The Blockchain has literally transformed the facets of an array of industries and the real estate sector is not lacking behind in maximizing the gains from this innovative technology. The real estate sector is booming and according to one of the stats available, about 210,000 companies operating in residential brokerage and management generated $200 billion of revenue.
As of now, the terms of the real estate market were usually dictated by the large corporate houses and influential property owners. However, as Blockchain technology disrupts the real estate industry with impactful power such as increasing the speed of transactions, bringing in more efficiency in terms of transparency, reducing the heftiness of paper works and others.
We can already witness the vital changes as a number of real estate companies like the RealtyShares have started to accept bitcoin as a medium of payment that not only increases the speed, but also reduces the transaction charges. This surely is a positive indication and it is being estimated that many other real estate agents will join that list very soon.
The Blockchain is a peer-to-peer ledger system based on the encrypted technology that records the transactions or blocks Here each of the blocks are connected with one other that are immutable, meaning it cannot be modified or deleted. There is no presence of third-party during the transaction and it remains free from all sorts of controls and regulations.
1. Blockchain Eliminates the Possibilities of Middlemen
So, far middlemen or intermediary played an important role in the real estate sector for finalizing a deal between two parties. When you think of buying or investing in a property, you always had to deal with brokers who would take a good share for the services offered.
However, enter the Blockchain technology and you won’t find these middlemen or brokers anymore within the scene. This is because you are paying or receiving money in terms of cryptocurrency such as Bitcoin or Ethereum for buying or selling the property. So, you don’t have to pay brokerage or the extra fees for finalizing the deal.
2. Cost Effective and Validation
Yes, it’s true; you can save a lot of bucks by using the Blockchain technology for conducing transactions. We have seen earlier how Blockchain has eliminated the middlemen and allow you to be cost effective as you don’t have to pay anything extra.
The transactions conducted by means of cryptocurrency are highly secure and the validation process establishes the trust factor.
3. Reducing the Cases of Forgery in Real Estate
We come across a number of incidents where people resort to unethical practices in real estate so as to illegally grab the property. In fact, it has become a common practice of producing fake or false documents claiming that a person is the owner of the property but he is not actually. Well, there are various ways through which a person can produce forged documents and it is easier too.
But then you have Blockchain, which has come as the biggest rescuer of the genuine property owners, buyers or sellers. It is full-proof evidence that you have purchased or sold a property with proofs of ownership, exchange and transaction. Moreover, it has also replaced the paper works with the digital document taking the trust factor to the next level.
What it does is it uploads the title documentation to the Blockchain network so that other users can view and verify it accordingly. This indeed, is a substantial proof that you are the actual owner of the property.
4. Maintaining Transparency through Smart Contracts
Only a handful of people buy a property without availing any loan or any other mortgage process while the rest of the buyers and investors usually apply for home loans. And you are well aware of how harrowing the entire procedure is.
It takes a long time until your loan application gets processed and then the amount is sanctioned. However, the Blockchain technology offers the facility of Smart Contracts that can actually simplify the whole process.
But if you think that developing the smart contract is a piece of cake, then you may have to reconsider the decision. It is best recommended to avail the services of experienced Blockchain developers to do the job. Now how does it help or work?
The Smart Contract allows you to develop a digital ID for the concerned property either as a buyer or seller. This makes the transfer of the ownership much easier, faster and smoother. In addition, the smart contract also helps in monitoring the transaction process. Yet another benefit is that they cannot be changed, deleted or tampered as they are permanently stored on the Blockchain real estate.
So, ultimately the process of applying for the loan or mortgage also becomes much simpler; all credit goes to this new technology. You can dream of owning your own home without undergoing any hectic formalities.
5. The Benefit of Liquidity
The Blockchain technology has also enabled the investor to sell the shares of property much more efficiently and at affordable prices. In fact, you can even convert an asset into marketable securities for the fraction of what it could cost previously.
Today, home equity has gained more liquidity. Liquidity allows you to come in and out of an investment easily. It has become prominent in the real estate sector as most of the investors have to wait for too long with no liquidity.
However, the Blockchain has tried to resolve this issue letting the investors change their portfolio according to the situation of the market. As such the long wait is over now on investments as the Blockchain offers a much wider scope.
This is due to the fact that the flow of capital would become easier. The investors won’t get into a tricky situation and they take decisions much more easily whether to buy or sell the property. The capital flow across borders would also open the gates for international markets.
6. Ensuring Reliable Voting
The Blockchain technology also ensures that voting done in building, apartment or complex is reliable. The voting usually takes place if the residents of the building have to take an important decision with respect to maintenance and infrastructure. The vote is registered in the right manner.
The Blockchain is fueling a number of industries and real estate has taken a lot of benefits from it. It has made the life of both the property buyer and seller easier by securing from the hassles of adopting the traditional methods of property investment.
There is no middlemen allowing you to save money and time, and it also reduces the risks related to frauds to a large extent. However, the concept is still new and it will take time to get into a proper shape.
The real estate companies are slowly and gradually realizing the various opportunities that Blockchain is offering and moving towards the digital cryptocurrency transactions.