Seeing how blockchain is impacting the banking and financial sectors, it is quite hard to see any industry still left unimpacted by this technology. Even real estate has been massively impacted by blockchain.
Blockchain in Simple Words
Talking about blockchain, it is a decentralized ledger of all the transactions via a peer-to-peer network. With the usage of this technology, people can easily and efficiently make transactions without the need for any central certification authority. Possible applications can be transaction settlements, cash transfers, financing and various others. As the name says, the blockchain is a chain formed up of cryptographically encrypted blocks. These blocks include specific information or data. After any transaction, nobody can change the data that a person has recorded within a blockchain as the downstream blocks confirm the upstream transactions.
In real estate, there are numerous possible uses for the blockchain coupled with the entire property value chain. In brief, one can use blockchain to transfer the purchase cost for real estate transactions by using established cryptocurrencies. One can also do it through initial coin offerings (tokenization).
There are many ways that people have started using blockchain technology in real estate. Blockchain offers a simple and safe way to carry out complicated real estate transactions for title transfers to price negotiations. Blockchain digitalizes and streamlines many steps of buying a property by offering secure and virtual solutions. The point is blockchain can help in the real estate sector in many ways like:
Smart Contracts are electronic contracts that run on computer protocols that may automatically monitor the stored clauses or rules. It can even automatically perform defined actions at the time of a trigger event. Hence, with blockchain smart contract technology, a written fixation in the form of paper is unnecessary. In future, blockchain can help to massively boost market transparency and solve principal-agent problems.
Blockchain is completely capable of offering the transparency that the real estate sector demands. As you already know, the real estate sector experiences a lot of corruption. But with the usage of transparent systems, it can finally stop. If real estate companies use blockchain real estate for their solutions, the consumers can see just where the money is flowing. Similarly, since the main database will stay public, nobody can alter or remove any transaction once it enters the blockchain.
One of the finest benefits of using blockchain in real estate is the drop of the overwhelming intermediaries. In reality, so many intermediaries give a boost to the complexity and added cost. Blockchain is effective and efficient in removing the middlemen from the equation. So, by getting completely digital, you do not need to tackle the redundant middleman cuts.
Similarly, any new listings on the platform are going to go through a complete verification process. So, there is no room for scams or fraudulent activities in the real estate sector. Not just it’s more efficient for the investors but for the huge real estate companies too.
End of Data Silos
Data is spread across real estate firms and agencies. Therefore, you may never find any single source of the point where you can easily get access to all the data necessary for your purchase. It is even more crucial and necessary for enterprise companies. If there is only a single database including all the information from different stakeholders, then the company’s efficiency will increase massively.
In reality, blockchain can easily provide a company tamper-proof shared logs that can gather and compile every piece of information about a property. Hence, blockchain in real estate can help in solving this massive issue and boost overall revenues too.
Efficient and Safe Transactions
The transactions happening daily in real estate are via wire transfers and takes up a lot of time. Similarly, in many instances, the KYC verification or other types of documentation eats up a lot of money. But with the use of blockchain, transactions can take place within minutes and in a safe manner.
Moreover, even in the worst-case instances, blockchain can securely finish a process in a day. However, previously it used to take days to finish. As a result, both the investors or customers will become more eager to invest and not withdraw from it.
You can also use blockchain-based secure QR codes for efficient and safe transaction processes. These QR codes are tamper-free as they have a unique hash value linked with a hash value in the blockchain. Hence, nobody can meddle with it.
The Bottom Line
Individuals, enterprises, and governments can greatly benefit from exploring the possibilities of blockchain in real estate. If you are new to blockchain and want to make the most of it for your business, let us discuss it at ProofEasy.