With the advancement in technology, it is better to walk with it. Those who are isolating themselves from the change are rather impractical. Blockchain has been changing the working of a lot of industries. However, with popularity, every other industry wants to take advantage of it. As per the research, around 77% of executives’ states that: they can lose their competitive edge if they do not implement blockchain in their workflows.
Real estate is a competitive industry, and blockchain can do wonders in this field. Well, this article is all about how blockchain can reshape and enhance the real estate industry.
Current problems of the real estate transactions:
Before we move on to Blockchain benefits, let us explore real estate transactions' current problems. Most Americans find current real estate transactions extremely irritating. For them, real estate transactions are a headache; and they should become simple. Highlighting the main problems of the transactions.
Fraud and Scams: The real estate agreements are in the form of papers. The contracts can easily be scammed. Moreover, real-estate contracts demand a lot of paperwork, which takes on a lot of money and time. The increased money and time risks losing a potential client. Besides, there is a lot of involvement of third parties. The more intermediaries, the higher the unwanted fees. In addition to this, the entrance barrier is risky, when it comes to property investing. Without significant financial resources, the industry remains closed to investors. Lastly, the main challenge is to obtain accurate property information.
We have talked about almost all the issues of the real estate industry. Keep on reading to know about how blockchain can resolve the problems.
Benefits of Blockchain:
If you go back in time, you must have thought about how blockchain cannot bring much change in real estate. The advantage of blockchain in real estate will most likely change your mind. We will be listing down the most important benefits that the blockchain can deliver to the real-estate industry.
Property search like never:
If you have worked in the real estate industry, you must know about the challenges. Moreover, the industry uses multiple listings and services to find information about a specific property. The whole process demands time and attention. Also, such services require costs; and you are also not sure about the provided data. In addition to this, the real estate pays to the API and its implementation to get access to MLS. Another addition to the costing.
With blockchain, all these problems can vanish from the table. The real estate data can be transmitted into a P2P (peer-to-peer) network. This network allows additional monitoring of the data required. Not to mention, due to the open and accessible information, the commission of MLS would decrease.
Pre-purchase due diligence:
Due diligence is a pre-purchase process, and it is an important step that allows you to discover the legal aspects of the purchase. Moreover, all the financial, technical, and other problems before making a purchase get clear through a due diligence process. However, this is the primary step and most crucial step. But verification of the papers, tenant list, ownership. Renovation cases etc., takes a lot of time. All these documents and piles of writing take a lot of time to check.
The blockchain allows you to have digital access to all the documentation. You can get access to any paper at anytime, anywhere in the world. Not to mention, you need to have a proper internet connection to access the document.
Direct contact and no Intermediaries:
You can count additional expenses on your fingers, even when you think about purchasing a property. The real estate industry is full of intermediaries and other fees. The cost of lawyers, agents, property appraisal, applications, etc., however, the more the intermediaries participate, the more money you will be spending on the services.
Thanks to blockchain, you can quickly eliminate the system involving multiple intermediaries. With automatic payments, digitization of the documents, and a single property database, you can manage everything on your own.
Real estate transactions are challenging, which is why a lot of people consider it a headache. Several parties are involved during the transaction, such as tenants, brokers, property owners, lawyers, agents, etc. Not to mention, gathering them up is another story. Drawing up a lease payment agreement demands to go through a process of checking by the bank. It is indeed difficult to manage and control the documentation.
The smart contract implementation can make all the transactions transparent and automated. You do not need to sign the agreement in the presence of other parties. However, both the main parties need to sign a smart lease contract; and it will automatically transfer payments at the given time intervals.
There is a whole concept about real estate: real estate investment is the occupation for people who can afford significant capital. However, with the advancement in technology, and thanks to blockchain, there are changes in this concept. Trade via cryptocurrencies allows the investor with small capital to start trading on the real estate market. The whole process increases the capital, which allows smaller investors to up their game.
Fraudulent activities are common in the real estate industry. You can think of the real estate industry as a fertile ground for fraud. However, complete authentication and checking of the documents require a lot of time and money as well.
Blockchain provides a more transparent approach—a more decentralized platform that allows all the data to be accessible to each transaction participant. When the participant holds power over the transaction, it reduces the risk of fraud.
We have listed almost all the main benefits of blockchain and how it can enhance the real estate industry's future. Moreover, people are getting an edge in the industry from the benefits of the blockchain. Many famous startups such as Harbor, BitRent, Ubitquity, SmartLaw, etc. have already started to implement blockchain in their workflow.