Blockchain is much more than just a buzzword! Being the most adopted and implemented technology, Blockchain has a huge role to play in the real estate industry. The total global real estate valuation comes to a whopping $217 trillion, while the residential property makes about 75% of the total evaluated amount.
In a deeper look, the real estate industry is amongst the pre-eminent asset class which will be highly impacted by the global monetary condition and investment activity, having the power to impact national and international economies. Blockchain can be the biggest breakthrough in the real estate industry with the most required feature- Security!
What’s holding back Real Estate Industry?
Other than real estate, you won’t find a lot of investments bringing you profitable returns or at least some price stability. Well, the current transactional process is long and complex, here are a few holdbacks of traditional real estate industry-
Doesn’t fit all
Not everyone is a part of the growing real estate industry, it’s generally the choice of rich or the ones with some financial stability. If you wish to make investments in another country, there will be numerous barriers including citizenship, international bank accounts, credit score, financing, accreditation, cash requirements and most importantly the accessibility to the right sponsors and fund managers.
Investments aren’t the easiest of things and when it comes to international real estate investments, you require to pay numerous fees which includes exchange fees, transfer fees, broker fees, attorney fees, taxes, and investment fee. The reason behind the listed fees is the involvement of middlemen. Additionally, you are required to consult lawyers and accountants to assure your tax returns are in order.
You cannot expect the transactions to go quick and smooth! When it’s a matter of huge amount, it takes time! The process isn’t a one-way road, it involves buyers, sellers and various middlemen which lowers down the speed of transactions and delays the process further.
What does Blockchain do in Real Estate?
Every Blockchain development company claims the powerful usage of the technology irrespective of the industry but, real estate does stretch an extra mile in terms of having blockchain implemented in the process.
Blockchain is a series of data record managed by a cluster of computers which is not owned by a single entity. The technology brings in three prime properties aiding the most complex real estate holdbacks-
Tons of data stores in each block of a blockchain network doesn’t belong to a single entity. The access is shared to the ones included in the network.
The stored data in the network is completely tampered free. Once the data is entered, it cannot be edited in any way making the entire process simpler.
Due to the decentralized nature, blockchain is entirely transparent. The data stored inside can be accessed and traced by everyone in the network.
How does Blockchain resolve the Real Estate holdbacks?
The technology brings several utilities into the real estate ecosystem with the most required elements-
Smart contracts are the automated set of steps which are self-executed with specific instructions coded and implemented when the preset conditions are fulfilled. In simpler words, smart contracts follow an approach where every step is connected to the upcoming in the row. If the first step is executed, the contacts will automatically implement another and keep on doing the same repeatedly until it reaches the final outcome.
The reason why it can be appropriate in terms of real estate is the elimination of the middlemen in the process. The buyer can directly connect with the seller without the need for middlemen in between. This cuts down the extra pricing, hidden charges and the struggle of verifying if you have genuine people on board. Another possible benefit of having smart contracts implemented is the increased process speed. Imagine no interruptions of middlemen, complete transparency and at most security, how much the blended approach can speed up your buying and selling experience!
Tokenization is the most interesting process in the blockchain. In simpler language, tokens are the digital representation of the assets which can be exchanged in place of cash, each token represents some numeric value which can be used to purchase something else accepting the similar payment mode. This can be better explained with an example, suppose you own an apartment flat evaluating a certain amount, you wish to sell the half property as you just require half the amount. In legal terms, this isn’t an option, nor the traditional real estate process allows the same. But, with tokenization, it’s possible! You can sell the property through a certain number of tokens and keep the rest for yourself. Though the process isn’t legally verified yet but, can surely be a revolution in the real estate market.
Blockchain is revolutionary! Implement the power of the technology to enhance your property buying and selling experience. You can also use a reliable cost calculator to get an approximate Blockchain Development Cost Estimate within minutes. Initiate a word with the real estate software companies and get started.