The Biggest Role Blockchain Plays in Real Estate
What are blockchain assets?
Many people conflate blockchain and cryptocurrency, but they’re two different concepts. The network merely made Bitcoin possible in the first place. It served as the base technology for the peer-to-peer electronic cash system in 2008.
That said, cryptocurrency isn’t the only application of blockchain. The network can hold many digital assets, and it has now made its way into real estate.
Many industries are tapping into this technology to make their transactions more secure. What is the role of blockchain in real estate?
Its roles in the industry are increasing as people adapt to the new technology. Learn more about how it plays into real estate:
The Role of Blockchain in Real Estate
The Real Estate buying and selling process has been the same since brokers and agents appeared over 165 years ago. To this day, we adhere to the same practices, but the blockchain is slowly changing that.
Thanks to smart contracts, blockchain can eliminate many time-consuming processes. Here are some examples of how it’s transforming the real estate industry.
Blockchain records every transaction, which is visible and trackable by anyone. The technology keeps these records in a way that’s impossible to change. No one can reverse it once it goes into the network.
Every listing agreement, letter of intent, and other documents are on the blockchain. The contracts are readable, establishing a deeper layer of trust between buyer and seller.
With blockchain, you can sign smart contracts instead of their paper counterparts. You can now buy real estate online from anywhere in the world. While it has been possible for years now, the new technology allows for more secure transactions.
Smart contracts can replace the intermediaries in real estate transactions. They’re like paper contracts, but they’re more secure and immutable.
The contracts execute themselves once both parties fulfill the set conditions. There’s no intervention needed from a third party. As such, they leave no room for doubt.
Using smart contracts speeds up the whole process. They remove the need to meet with brokers, lawyers, and bankers in the first place.
Other Blockchain Applications in Real Estate
The use of blockchain in the real estate industry can go beyond smart contracts. Some other ways real estate can use it are as follows.
One of the primary issues new generations face today is home ownership. With the increasing prices of properties, the average income won’t even allow them to get a foot in the door.
Blockchain can change that harsh reality. The technology can turn assets into tokens, which people can buy according to their financial capacity. It applies regardless of the asset tokenization platform.
Tokenization is securing blockchain digital assets. Real estate is now using it to divide properties and provide investment opportunities for more buyers. You can do it even in pooled real estate investment arrangements.
The token represents any real-world assets, such as bonds and artwork. After its creation, it can further split into more granular pieces. These become more accessible to a bigger audience.
Due to this technology, you can now buy tokenized real estate and gain fractional or partial ownership. People of any income and status can invest in real estate.
Selling a house often takes months, while some sellers can’t get rid of their properties for over a year. If your timing is right, you only have to wait a few months.
But, what if you can sell your house more quickly? Blockchain in real estate makes that possible.
Tokenization also increases the liquidity of any property. People can trade and sell the tokens more easily.
Owners can buy or sell their shares faster in an otherwise slow-moving industry. As a seller, you need not wait for a buyer before getting value from your property. Use your real estate investment software programs to accomplish the task.
Did you know that you can also verify identities using blockchain? The technology allows you to keep safe while buying and renting properties.
Landlords can use these features for leasing their properties. They can verify the identity and income of the tenants first. They can also check the employer and references on a digital ledger.
Blockchain uses tamper-proof technologies for verification. At the same time, it encrypts personal information, so users can remain anonymous when they wish to be. It can facilitate the contract signing securely, as well.
This feature protects the renters, too. They’ll know that the property listing is legitimate if it’s on the blockchain.
If it’s on the blockchain, it’s available for anyone to see. You can verify ownership, land titles, and other legal documents on the digital ledger.
Do you want to verify the title ownership of a plot you’re planning to buy? Log into a blockchain registry. Whenever you need to cross-reference something, you know it’s always there.
Blockchain makes it easier to keep track of transactions and records. Unlike the traditional real estate methods, it vets and stores any data securely. Third parties can’t interfere with it to list fake information or inflate the prices.
Learn More About Blockchain and Real Estate
The use of blockchain in real estate is still in its infancy stage. Only a few people know about the new technology and its possibilities.
Once it goes in full swing, blockchain will completely transform how we buy and sell properties.
If you want to know more about investing and digital asset blockchain, contact us today.