Blockchain is the new buzzword in the world of transactions. The technology has proved to be as effective as the way the internet has redefined communication. Blockchain was specifically introduced to support cryptocurrencies like Bitcoin.
However, with the passage of time the technology has revolutionized several industries due to the ease of transactions and the positive impact it bought. The disruption of blockchain in several industries has led to the launch of several startups and investment of billions of dollars.
The major advantage of Blockchain is that removes the intermediary to make the transaction. Intermediaries include credit card service companies, banks and stock exchanges, which may result in higher cost due to added service charges. Moreover, there are a number of chances of being prey to fraud and crime.
Blockchain without any doubt is a major revolution in the real estate industry. Let’s have a look at how Blockchain technology can change real estate in 2019 and beyond.
Tokenization
In the past, owning a profitable asset required investors to have big wealth and wait for the right opportunity to yield the profit. However, now things have changed with tokenization. It allows easy accessibility and ownership of assets through cryptocurrency to divide assets into tokens that are stored on the blockchain.
Real estate investors who own property can now resell their share in the open market through secondary trading. Moreover, people living in various geographic areas falling under different tax brackets can take pride in investment opportunities that were not available in the past. In addition, the landowners are now able to sell off just a portion of their property to the potential clients.
Smart Contracts
In today’s era when blockchain is not adopted among masses can change the scenario of legal agreements. For instance, nowadays, intermediary and many other factors are involved during the buying and selling process. However, with the help of smart contracts, only the buyer and seller are involved, without any interference by an intermediary.
The transaction time can be reduced along with chances of scam and fraudulent activities. The seller has to provide tiny detail about the property and buyer has to provide the necessary information on a fully secured and encrypted block. The legitimacy of the transaction is verified by computer protocol and no transaction can be completed unless all of the conditions are met. For instance, if you buy apartment in JVC, you don’t need to beg someone to act as an intermediary so that transaction can be completed.
Dealing in real estate especially when it comes to buying involves emotional decision and attachment. The intermediaries such as attorneys and brokers get a share of their commissions for people making the biggest financial decision of their lives. So far, smart contracts are presently available to replace intermediary and the technology will play an important role in making the process smooth and efficient.
Property Title
Title insurance has grown over the year and reaping a hefty revenue annually by ensuring that the property is clear from the old debts and liens. As most of the metropolis has its own way of storing the property data. They either keep records in a traditional way such as paper or maintain their records online.
However, if the property title is centralized on the blockchain, it could save a hefty amount of money and time. Moreover, it could also eradicate the need for title insurance. There is also the possibility of adding information about damages, improvements, and construction to the title. It will help property buyers to know what they are investing in and what will they get.
Putting all the title on the blockchain will help property buyers but when it comes to entering the data from every municipality, it would require months or even years to complete the task. Hence, it would be a quite expensive and laborious job.
In the future, blockchain is surely going to be the deal breaker in the real estate industry. With the increase in investment in real estate, the real estate professionals are now transitioning towards a more reliable and trusted technology i.e. blockchain. In the coming years, blockchain would evolve as much as the internet has gone today.
