It is no surprise that many new technologies and platforms came into existence in today’s digital world that has changed the scenario of the global market. Blockchain technology is one such aspect that has impacted many leading sectors of the global market, and the real estate industry is one of them. Blockchain technology has created many new opportunities in the real estate sector and has completely transformed the way the realtors used to work.
Whether smart contracts, property listings, new payment modes, or documentation, blockchain technology has tremendously enhanced and simplified the operations of the real estate industry. And that’s what our today’s article is all about! In this article, we will be discussing the top ways through which blockchain technology is revolutionizing the real estate sector. But first things first!
What are the Problems of the Real Estate Industry?
1. Complex Agreements
The commercial real estate market involved a lot of complex agreements and paperwork which are tedious for a common person. Any slightest mistakes in any of the agreements can result in huge complications and even monetary loss for all the parties involved.
2. Document Security
As discussed above, the real estate industry deals with a lot of paperwork, and those documents are generally in physical form. As evident, physical documents are more prone to thefts and frauds, and often require a lot of care and security measures.
3. Many Intermediaries
One of the most common and significant problems of real estate is the inclusion of intermediaries. Many intermediaries often increase the actual cost of the property and that becomes a matter of concern for the parties involved.
4. Inefficient Information
The real estate industry calls for real-time data to enhance user experience and revenues. However, with traditional tools, this real-time information is something difficult to achieve.
5. Improper Cash Flow
Last but not least, maintaining a proper cash flow in real estate is a tedious task for almost all the parties involved. Keeping a track of the payouts, taxes, the payment received, maintenance charges, and so on requires a lot of resources.
How Blockchain Technology benefits the Real Estate Industry?
Now that you are aware of the common problems faced by the real estate industry, let us quickly discuss how these problems are solved by blockchain technology!
1. Smart Contracts
The first and foremost benefit of blockchain technology in the real estate industry is smart contracts. Smart contracts are an exceptional application of the blockchain in the real estate sector to streamline the lease process. Smart contracts are a set of predefined contracts that cannot be edited once they get finalized.
For instance, if the contract says that the property will be distributed between X Y and Z in the ratio of 25:35:40, then it will take place for that particular situation and time. Also, since these contracts are lines of codes, there is no such issue of storing these contracts as such. They are electronically stored and safe from all thefts and frauds!
2. Digital Documentation
The next big thing that has been impacted by the blockchain is documentation. We all know that real estate deals with a lot of documents and the safety and care of these documents include a lot of resources. As in, before users plan to buy a property, they have to spend sufficient time checking all the legal documents and verifying all the owners.
In fact, some of these legal documents often require a lot of experts and third parties that even consume much of their time and even involve great cost. However, with blockchain technology, all those legal documents could be digitized with just a click on the screen. Blockchain keeps all the critical legal information safe and secure, thereby eliminating the need to spend extra on the storage and safety of the documents.
Furthermore, since the blockchain platform is decentralized, it is easy for the parties and stakeholders to access the vital information anytime they need it. Blockchain also reduces the chances of frauds and thefts of legal documents and ensures transparency to a much certain level.
3. Elimination of Intermediaries
Nw, that’s a significant advantage of blockchain technology in the real estate industry. Earlier, buyers had to pay at least 2-5% of the costs to the intermediaries for any property they wish to purchase, this would eventually increase the cost of the deal, and would irritate most of the customers. Additionally, the duration of the deal involving all the intermediaries would take at least 40-50 days which was again time-consuming.
However, with the advent of blockchain technology, things changed to a much significant level. Today, blockchain has eliminated the need for all the intermediaries (experts, lawyers, middlemen, etc.) by digitizing the complete process. From property listing to pay for the house, everything can be achieved via blockchain technology. Bitcoins are an excellent example of payment through the blockchain platform.
4. Property Listings
Multiple Listing Service is not a new phenomenon in the real estate industry. With MLS, the users can browse through hundreds of properties for purchase or rent purposes. However, a common issue with MLS is that it is only meant for real estate brokers. That means the deals were only for agents and not genuine buyers. Moreover, the data stored in MLS is very unorganized making it extremely difficult for normal buyers to understand it.
But, that’s not the case with blockchain technology. Today, with dedicated blockchain property listing platforms, the data can be accessed by anybody wishing to invest in properties. Furthermore, the data is decentralized and electronically stored, so the purpose of storage and security is satisfied efficiently.
All the information of the agents, sellers, present value, maintenance cost, and so on can be updated in real-time that further enhances the user experience. All in all, the data that was held by a few can now be accessed by anyone today because of the advent of blockchain technology in the real estate industry.
5. Reliable Transactions
Transactions play a crucial role in any sort of industry, and it becomes of the utmost importance when it comes to the real estate market. Earlier, the clients had to maintain a record of every transaction they made to the sellers, agent, or lawyer for purchasing the property, and all that consumed a lot of time and resources.
However, with blockchain technology, the scenario today has changed completely, of course for the better! With the advent of cryptocurrencies like bitcoin, people today can safely transact with all the agents involved in their real estate deals. Not only that, but they can even trace back every transaction for future references.
With the use of crypto wallets, they will not be needing any record-keeping systems, and the transactions would also be safe and free from fraud and theft. Crypto wallets often require a special key that is only with the user!
6. Reduced Cost
Where a traditionally real estate has been known for the riches, the advent of blockchain has made it accessible for the common people as well. Earlier, only those who had a sufficient amount could afford to invest in real estate deals. However, things did not remain the same after cryptocurrency and public lege came into existence.
Today, people can pool resources with each other to invest in any certain property. Blockchain technology allows a certain group of people, who might not know each other, to purchase a valuable property with resource pooling. The individual owners can even sell their shares in the future when they need it, and all the transactions will remain public and transparent.
In short, we can say that blockchain has solved the years-long problem of the real estate industry which is the liquidity of resources!
7. Smooth Registry Process
Last but not least, blockchain technology has solved the long-term problem of the real estate industry which is the registry process. With tokenization, an excellent application of blockchain, the problem of a smooth registry process can now be achieved.
The token is a sort of smart contract in the blockchain that represents a certain asset. In the real estate industry, this asset is often the land or the property of the user. Now, whoever has the token allocated to their property, gets a unique number in the blockchain. That unique identity cannot be transacted with another token. Moreover, the person who holds that toke is considered as the owner of that property.
Hence, it becomes seamless for the owners to prove their credibility of ownership with the help of a unique token identity. Additionally, the tokens can be exchanged to any sellers or buyers for buying or purchasing the property.
With tokenization, the legal paperwork might not get reduced, but it can serve as the quickest way of proving the ownership of the property in no time!
Blockchain Technology – Future of the Real Estate Industry
So, those were some of the ways in which blockchain technology is revolutionizing the real estate industry. To conclude, we can say that blockchain is the true future of the real estate industry. The many advantages and opportunities brought by blockchain in real estate have led many marketers towards the technology, and soon with the advancement in this sector, many more businesses will get attracted towards it. Do you also want to become a part of the same community? Don’t worry, we have got you covered!
We, at Matellio, are a leading blockchain solution provider for years now. Our certified and reliable blockchain developers ensure to satisfy every need of your business whether a startup, or a Fortune 500 company. That’s why we are a leading name when it comes to the blockchain solution provider. Our portfolio speaks of our work in a more efficient way.
Witness an enhanced brand value, and increase in your real estate revenues and deal with the integration of blockchain and other smart technologies in your real estate business. Reach us today, and get a free expert consultation on your business growth and development.
Till then, Happy Reading!