Blockchain is a series of cryptographically encrypted blocks comprising explicit information or data. After a Real Estate transaction, recorded data within the blockchain can’t be changed, since the downstream blocks authenticate the upstream transactions.
Blockchain Technology promotes the trust system that makes it ideal for real estate. Real estate companies all over the globe prefer to use the smart contracts and hyper ledger technologies to proficiently facilitate the process of buying, selling, renting, investing and lending.
In the real-estate industry you can implement the blockchain technology to gain so many real benefits i-e title transfers, price negotiations, secure and simple way to perform complex transactions, etc. After the implementation of Blockchain real estate transactions took another turn, now you can see digitized apartment tours. Users are allowed to schedule a self-guided tour, and they can view the property without interference of the agent.
Future impacts of Blockchain:
Currently, the blockchain technology is evolving in the real estate industry, soon the industry is going to take a shift to add liquidity in the real estate assets. There are very few blockchain-based real estate applications, generating a shift towards digitalization and making the transactions more liquid and safe
Smart Contracts are making it possible to design blockchain-based rental, sale and purchase contracts, by providing and evaluating, maps and storing sensitive real estate data, meant to evaluate the property worth. This data will be used by commission service providers, all service providers, administrators, contract authorities, etc. numerous applications are conceivable, especially in connection with IoT (Internet of Things).
If you need a common database of a network lacking trust but requires numerous open accesses, then implementing blockchain technology will be the perfect choice for you. It’s a multifaceted but promising technology that requires substantial technical knowledge and intensive research on your behalf to utilize its enormous potential.
Blockchain-based commercial real estate:
Recently, Blockchain technology is being implemented in the (CRE) commercial real estate industry and other real estate blockchain projects. The CRE managers are finding significant implications of blockchain-based smart contracts by knowing the greater potential of blockchain in this industry. All the CRE operations can be transformed with Blockchain technology such as safe and secured property transactions i-e lease, sale, purchase, financing, and management.
Opportunities and challenges of Blockchain:
Here, we can check out how blockchain-based real estate platforms are creating opportunities while alleviating some challenges. Here are some interesting use cases to improve the lease, purchase and process with the usage of blockchain:
- Make the transactions fast, safe and transparent
- Advance property search process with blockchain technology
- Accelerate pre-lease process of the real estate property deals
- Improved real estate leasing and cash flow management
- Facilitate smarter real estate decision-making
- Transparent and low-cost property title management
- Competent and easy process of financing and payments
Liquid Real Estate transactions:
The real-estate cryptocurrency facilitates the future real estate transactions and helps in the acquisition of new homes, buildings or properties via cryptocurrencies. Most of the startups prefer to buy and sell homes in cryptocurrencies, considered to be the most secured means of payment. The new type of funding requires more dedicated platforms to promote buying and selling of goods online. By using the blockchain technology, users can simply bypass the limits imposed on the total amount of international transfers, hence making the transactions and payments more liquid in a secured way.
Real-estate blockchain projects provide safe and secured transactions by reducing the risk of fraud. Innovative technology is implemented on all stages of real estate transactions to simplify the data transmission and reduce the overall deal closure time.
This type of advanced digital architecture automates the real estate transactions that are useful in the places where there is a risk of corruption or lack of transparency. Blockchain technology will make it easy for dealers to analyze the true owner of the property or land. This technology can also be used as a tool to visualize the status and ownership of properties and deeds. Entire information can be consulted and authenticated any time and without the limits of blockchain real estate startups, agencies, banks, buyers or sellers.
Real Estate Smart Contracts
The blockchain technology offers unmatchable speed with smart contracts that don’t require third-party intervention. These digitized real estate blockchain smart contracts are similar to paper contracts, as they deliver secured information that can’t be changed or modified.
Mostly smart contracts are being utilized in the automation of value exchanges, i-e crypto assets or currencies. The accounting entries related to these digital values automatically get recorded in the blockchain, making the transfers evident and irreversible. These features of smart contracts don’t leave any room for doubt or interpretation in the daily transactions.
Impacts of Blockchain Technology in Real Estate Industry
There are so many industries that noticed the progressive use of blockchain technology, just like the real estate sector. The most significant asset that needs to get automated is real estate. However, in the past few years, blockchain and real estate are being used in the same order. According to the prediction of market experts, blockchain and cryptocurrencies have great growth in the real estate industry potential in the blockchain in a real-estate research paper. This digitalization will make the process easier for everyone, allowing people to do safe, secure and rapid transactions without worrying about fraudulent activities. Here, you can check out ways in which blockchain is changing the real estate industry;
- Platforms and Marketplaces
The real estate industry is mainly known for its property listings and uniting buyers with sellers. But Blockchain technology is introducing new ways of real estate trading by launching new trading programs and digitized marketplaces. Here, real estate experts will be allowed to trade properties just like stocks are traded on an exchange. The dealers can exchange the accumulated tokens as an authorized currency, with the buyers who own the percentage stake of the capital.
- Elimination of Intermediaries:
In the real estate industry, banks, lawyers, and brokers have their own place. But with the implementation of Blockchain technology in the real estate industry, there will occur a great shift in their roles and support procedures. These safe and secure ways of transactions will automatically cut out the agents and other intermediaries that might increase the cost of the deal. So, this process will help the buyers and sellers to save the extra expenses and close the deal at a lower cost. Furthermore, we can say that digitalization will make the process faster, simple and hustle-free by removing the role of middleman.
- Property asset:
The real-estate industry is recognized as an illiquid asset because it takes too much time to terminate the sale. That’s not the case with cryptocurrencies, which are eagerly traded for authorized currencies via several exchanges. However, just like tokens’ money, liquid real estate property deals are available thanks to Blockchain Technology. It won’t let the merchant wait for a client who can afford to buy the property by enabling fast and secured transactions.
The transparency in selling business associated with a decentralized network can also reduce The Blockchain technology facilitates transparency while selling decentralized business network that will automatically reduce the total costs by eliminating extra charges. This technology enables you to skip out the mediators and save extra costs i-e professional fees, brokerage fees, inspections charges, registration fees, taxes, and loan fees associated with real estate. These costs might vary from country to country.
- Fractional Ownership
Blockchain technology allows fractional ownership by lowering the barriers to real estate investing. Typically, real estate investments require people to pay upfront money to acquire property and to fix the deal. But with blockchain technology, investors can simply access a trading app meant to buy and sell properties, just like you trade the tokens in the exchange market. Fractional ownership will help you to avert property maintenance by yourself, i-e maintenance and leasing.
Blockchain, a decentralized technology, offers trust and security in the real estate industry. It keeps the stored Information safe by allowing limited access to the peers present on the network, making data transparent and irreversible. Check out the housing bubble crash back in 2008 to analyze how lack of transparency and gluttony have caused disastrous consequences. A decentralized exchange built trust into the system because all the information transferred during the deal is verified by buyers, peers and sellers and kept confidential while conducting transactions. This scenario will automatically lower down the fraud attempts.
Currently, people are shifting towards Blockchain-based real estate platforms as they are enhancing the liquidity, safety and security of transactions by reducing the risk of fraud. Blockchain based digital platforms are helping people to innovate and transform the real estate industry by its security, transparency and fully decentralized network. It’s allowing people to reinvest their ownership in HyperLedger Blockchain real estate market through fully compliant, safe ownership. Blockchain abridges access to alternative real estate financing models by aiding investor management, ensuring investment transparency and incessant ROI tracking for investors.