This Technology Can Significantly Transform Real Estate Industry
Blockchain has not only disrupted the finance industry but also has several applications across various other industries. Whether it is retail, agriculture, or even healthcare, it is difficult to find a sector that has not been influenced by blockchain technology. Needless to say, it has found its way into real estate as well. Even though the transaction of real estate through digital means is against the traditional norm, blockchain is a way to change this. Assets like real estate can be tokenized and traded like cryptocurrencies through the introduction of smart contracts. Here are the ways in which blockchain can prove to be the future of real estate:
- Cutting out the middlemen
Brokers, banks, and lawyers have always been a part of the real estate industry. However, due to blockchain technology, there may be a shift in their role in real estate. Blockchain can be used to perform functions such as listings, payments, as well as documentation and cut out the intermediaries. This will make the process much quicker and also help buyers and sellers save money on commissions and fees charged by the middlemen.
- Allowing fractional ownership
Through blockchain, investors can even buy and sell fractions of tokes by having access to a trading app. This does not require significant money upfront and can also help the buyer to avoid managing the property like maintenance and leasing. Depending on the terms, the buyers may also enjoy using the property.
- Platforms and marketplaces
Blockchain can support trading platforms and online marketplaces to trade in real estate more comprehensively. Blockchain technology can be used to facilitate rental property transactions. Through tokenization, assets can be traded like stocks and transactions can be done online.
- Reduced costs
Blockchain can help buyers and sellers to save on the fees and commissions charged by middlemen. It can also eliminate several other costs such as registration fees, loan fees, inspection costs as well as taxes that come with real estate. Blockchain-powered platforms do most of the work and make transactions more secure, transparent, and equitable.
Real estate has always been an illiquid asset as it takes time for sales to conclude. However, cryptocurrencies and tokens can be traded for fiat currencies quite easily through exchanges. Thus, real estate as tokens can be readily traded. Sellers can also get value out of their property without waiting for a buyer who can buy the entire property at once.
Information stored on the blockchain can be accessed by all members of the network, making it immutable and transparent. Blockchain works in a decentralized manner, thereby lessening the risk of fraud. It also builds trust in the system and enables buyers and sellers to have more confidence in conducting transactions.