How Can Blockchain Revolutionize the Real Estate Industry?

Blockchain Revolutionize the Real Estate Industry Historically, a majority of real estate deals involve in-person transactions. It was practically unheard of until recently, that transactions with high-value assets can be done using digital means.

But, blockchain technology is transforming this practice and has revolutionized many industries, including real estate. This new financial system has not only changed the way people buy and sell real estate but has also helped in developing innovative ways to carry out standard real estate-related operations like title searches and outright property investments.

What Is a Blockchain Transaction?

Blockchain is a decentralized, permanent database that makes it easier to track assets and record transactions in an organization’s network. A blockchain transaction is recorded in a public ledger and distributed across a network of computers.

This transaction is extremely secure as a network of computers has confirmed it. These transactions are transparent and can’t be altered, making them ideal for the real estate industry. Real estate transactions can now be tokenized and exchanged like cryptocurrencies or bitcoin because of the inclusion of smart contracts in blockchain platforms.

Benefits of Using Blockchain in the Real Estate Industry

The continuous evolution of blockchain technology is sure to bring about many more benefits, but we look at a few reasons why blockchain already has everyone excited.

1. Platforms and Marketplaces

According to the real estate industry, 93% of home buyers in the US use online search engines to find a home. These websites are huge markets and platforms for real estate and link buyers and sellers.

By assisting with real estate transactions, blockchain creates new possibilities for real estate dealing and benefits these trading platforms and online marketplaces. For instance, Atlant, a real estate blockchain platform, automates real estate and rental property transactions by utilizing blockchain technology.

2. Smart Contracts to Eliminate Middlemen

When purchasing or selling real estate, you need to go through a legal procedure involving banks, attorneys and brokers. This can be stressful and can be time- consuming.

Blockchain’s smart contract can minimize the time and simplify the entire procedure. Smart contracts are self-executing contracts that have the conditions of the deal between the buyer and seller represented in a code.

Once the conditions specified in the contract are met, the code will carry out the transactions. Smart contracts enable you to do away with middlemen, as the entire buying and selling process is managed between the buyer and seller with the help of a neutral coordinator.

A business arrangement can be executed without a lawyer or broker. Code implementations are immediate, transparent and independent. For instance, as soon as the buyer pays the down payment, all parties will be informed.

This is a major leap forward compared to the traditional method, where all parties wait for updates for things to move forward. PropertyClub, a real estate platform uses blockchain technology and smart contracts for real estate transactions. Additionally, it allows users to buy property with cryptocurrencies and bitcoins.

3. Loan Mortgage

As loan origination and underwriting are still done on paper and are not standardized, the security structure is left for interpretation. Decisions on trading and asset maintenance are usually dependent on dated information and settlement delays caused by financial reconciliations have a detrimental impact on investor cash flow.

Blockchain offers a single version of verified data, safe data exchange, secure transaction monitoring and real-time payment settlement, making it a great option for banking organizations. Ownership rights, loan payment history and other important information can also be included in the loan mortgage to help with future servicing decisions.

In addition to collecting and distributing payments to beneficiaries, smart contracts can also give authorities access to real-time data.

4. Liquidity

The sale of real estate typically takes time to complete, hence it has traditionally been thought of as an asset that cannot be liquidated instantly. Cryptocurrencies and tokens, on the other hand, can be easily exchanged and liquidated and real estate can be easily sold as crypto tokens.

Tokenization is the division of an asset into shares that may be sold to investors as securities. By tokenizing real estate, buying and selling real estate will become more accessible and cheaper. This also provides an excellent option for developers when they want to raise money for future projects.

5. Fractional Ownership

Fractional ownership is a concept introduced by tokenization, where you can own portions of numerous properties rather than purchasing a whole one. With blockchain, investors would only need to open an online trading app and use it to purchase and sell tokens of any appropriate denomination.

Additionally, fractional ownership enables investors to collectively pool their funds to purchase expensive houses. It relieves investors of other costs related to real estate acquisition, such as maintaining and leasing.

6. Decentralization

Blockchain is a decentralized technology that promotes security and trust. Each member of the network has access to the data stored on the blockchain, making it transparent and unchangeable.

This helps both buyers and sellers to transact with greater confidence. As there is no one point of control it makes it very challenging for hackers to break into.

Every transaction is recorded in a decentralized ledger that cannot be changed or removed. This provides buyers and sellers with the assurance that their transaction is secure.