The entire globe is about to witness digital transformation with the introduction of Blockchain technology. There is not a single industry left behind that has not yet been influenced by this technological evolution. Recently, cryptocurrencies have been strongly affecting payments and foreign exchange. Even the real estate market could not escape this transition.
However, people still doubt whether blockchain technology will pave the way towards a brighter future or hinder the process. Blockchain will undoubtedly decode the traditional way of investing in the real estate market.
The biggest problem faced in real estate is - if we explain frankly, it is not open to everybody. It has always been an investment only by the capital holders. Even if the middle-class attempted to get this option, they get pressured under EMI and home loans.
Many barriers prevent most of the population from investing in the real estate market, such as credit score, accreditation, finance, cash requirement, fund manager, etc.
So, let’s learn how blockchain technology in real estate can shape the future.
8 Ways Blockchain technology will disrupt the Traditional Real Estate Market
The four significant changes that blockchain will bring are Tokenization, Smart Contracts, MLS with global standard listing and Title Management. And, these would result in the following aspects -
Secured transaction process
Previously, every transaction was executed through digital channels or offline mode. After the introduction of blockchain technology, the face-to-face agreement and cash transfers would come to a hold.
Tokens can be generated based on the final dealing, which is a quick and secure process. This would make tokens accessible in terms of global asset distribution, and anyone with sufficient capital and a stable internet connection can participate in buying or selling real estate.
Removing middlemen or intermediaries
The presence of middlemen in the industry has increased the level of difficulty. Along with that, the fee structure varies in different stages, for example, attorney fees, investment fees, broker fees etc. Every person involved in this buying and selling stage has their share, increasing the overall investment budget.
The interaction of blockchain in real estate brings along innumerable benefits. The most talked-about is transparency which can help to reduce the investment cost. This eliminates the need for middlemen in business transactions and restricts every intermediary, creating complexities.
Confirmation of legit documentation
While buying a property, one needs to consult with lawyers and accountants to keep a check on the legit papers and tax records. At present, a transaction occurs after KYC verification and other documentation. But, this requires heavy investment.
Once the process gets encrypted with blockchain, fraud and discrepancy would reduce. It is a smart solution for the verification of documents. The entire database would be open to the public, so there won't be an alteration in the transaction amount.
Further, in blockchain, the transaction can occur within a jiffy. The venture process would take a single day to complete making it easier for investors and customers to engage in the real estate business.
Ease the liquidity of the asset
After buying a house, the most challenging part is reselling it. Homeowners face difficulty in liquidating their real estate properties. If someone owns a house in an area that has low value, in this case, it becomes difficult to find a buyer. Meanwhile, one must seek help from a broker who charges a high amount, increasing the overall selling price. Thus, the liquidity of property becomes quite difficult.
Blockchain can create a platform where real estate companies can directly get involved in buying and selling. This increases the liquidity and enhances the reach. Anyone can go through the list or put their property on sale without getting scammed.
The most unexpected part of real estate investment is the slow transaction rate. Selling and buying property get disrupted due to the lengthy process and regulations. This also creates a barrier for potential buyers. One needs to get their requirements sorted and then look for a property, which is time-consuming. On average, six months is required to find the property, and another 6 months will be required to complete the process.
Blockchain introduces you to Smart Contracts. It is an electronic protocol where transactions are executed, but this can only occur if the conditions meet the computer-generated code. This provided aid while dealing with rental agreements, service agreements, transfer of property title, commission agreements, etc., thus, reducing the time and automating the entire process.
Eliminates the chances of error
There are possibilities of error which is quite natural. But, any error in the property listing can create trouble in the buying and selling process. This is where blockchain technology cuts down the loss of time with a real-time property details updating facility. Through a single platform, you can view the listing and go through the verification procedure.
Moreover, real estate investment requires the necessary information to proceed with the purchase. But, one would not be able to find all this information in a single room. Blockchain technology can offer that. Anybody can access all property-related information which is compiled into one segment. Thus, it can increase the overall revenue.
Easy access to data
Nowadays, the favorite process of searching for a property is through search engines. But, most websites have minimal information, or you might have to buy an expensive subscription to get total access to the property list. Further, the content might not be up-to-date as well.
In this aspect, Blockchain technology is a boon for brokers, and they can easily control the data. Further, there is no third-party involvement. Thus, improving the properties search options.
Transparency in titles
The most tricky part of real estate is the property history and forecloses. This is where most of the buyers face fraudulence and later struggle with legal issues. Blockchain technology changes how people search for properties online, which will speed up the process.
With blockchain technology's Smart contracts, everybody can get a transparent view of the title transfer with immutability facilities. And, even in the future, if somebody is interested in the property, they can check how the property was handed over from one buyer to another.
Blockchain offers a decentralized platform where MLS and corporate brokers can combine to form a database for the property. It helps create a proper networking base and offers fractional investment facilities. It eradicates the concern about mortgage fraud which can be easily prevented.
Many real estate companies have already applied blockchain technology to streamline their business. However, it still needs proper exposure. Meanwhile, if you are looking for a nondisruptive, value-for-money property to invest in browse through Srijan Realty. They offer you a home with smart technology integrated with their construction.
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