Previously, exclusively transacting high-value assets like real estate assets across digital channels was not a norm. Offline real estate transactions often involved face-to-face interactions with different parties.
However, blockchain has made it possible to change this. Assets like real estate can now be tokenized and exchanged like cryptocurrencies like bitcoin and for that, we need to say thanks to the advent of smart contracts in blockchain networks.
This method of real estate trading has its advantages and drawbacks. Here are six aspects in which the blockchain has altered the real estate industry.
The commercial real estate (CRE) industry has recently embraced and adopted blockchain technology. CRE executives are discovering that smart contracts built on the blockchain will play a far bigger role in their business. Property transactions such as acquisition, selling, funding, leasing, and management transactions may all be transformed through blockchain technology.
1. Marketplaces and Channels
The focus of real estate technology has historically been on listings and linking buyers and sellers. However, blockchain opens up new avenues for real estate trading, allowing trading platforms and online marketplaces to provide more robust support for real estate transactions.
2. No Intermediaries
The real estate ecosystem has long included brokers, attorneys, and banks. According to a Deloitte survey, however, blockchain could soon usher in a change in their positions and involvement in real estate transactions. Listings, fees, and legal paperwork are all features that new services will potentially take over.
3. Transparent Real Estate Transactions
One of the major issues in the real estate industry is transparency. Because of its decentralized existence, blockchain guarantees that the entire transaction exchange is open to all parties involved. The technology ensures that each property owner or the purchaser has access to information about the desired property, which helps to establish trust. As a result, using Blockchain for transaction exchanges dramatically reduces the risk of fraud.
4. Property Management
Since there are so many people involved in property management, it's a complex task. The majority of properties are typically handled using either manual paperwork (offline) or various software systems that are difficult to integrate. The entire property management mechanism is now being handled effectively using a single decentralized framework that uses blockchain-backed smart contracts. Anything from signing lease agreements to managing cash flow to filing maintenance requests is being done safely and transparently.
5. Automated Property Buy and Sell
The method of purchasing and selling real estate takes a long time. With all of the challenges, the sector is quickly slipping behind. As a result, smart contracts in real estate will simplify the process of buying and selling homes.
In fact, blockchain has the potential to automate the entire home-buying process. Consumers can access a website where potential sellers can showcase their assets. When they've settled on one, they can either go see it in person or take a virtual tour. They just have to set up the conditions and process the payment after that, and they're done.
6. Preventing Title and Deed Fraud
The avoidance of deed and title frauds is another blockchain real estate use case. You won't believe how many problems deed fraud has created in the last ten years. In fact, this type of fraudulent activity is on the rise, particularly in the realm of online property sales.
People may even sell their properties to a third party without your knowledge, which is frightening, to begin with. However, since blockchain will store all property details, owner information, and legal documents on the ledger, no third party would be able to take ownership of your properties.
The democratization of real estate properties is possible due to blockchain technology. It offers potential investors from all over the world the opportunity to try their hand at real estate investment options. If done correctly, this can be highly beneficial to the crypto-space, as it will improve the real-world value of tokens. The frightening part is that we've just scratched the surface of what the marriage of blockchain and real estate will achieve.