When most people think of real estate, technology probably isn’t the first thing that pops in their minds. After all, why would you need to go high tech in a field where you buy and sell property?
Strangely enough, blockchain technology has the potential to completely change the way we handle real estate—and it goes far beyond simply managing properties.
Here’s what you need to know.
Blockchain and Real Estate
When it comes to real estate, nothing’s simple and as straightforward as it seems. There’s a lot of paperwork and red tape that goes into buying and selling property. This leads to unnecessary delays, which can become costly for people working in the industry.
How can blockchain address this problem?
Thanks to smart contracts and its distributed ledger, blockchain can make real estate transactions quicker and much more efficient. Everything from buyer and seller information to property rights can be stored on the blockchain and accessed in real-time by all parties involved. What’s more, the use of smart contracts can completely eliminate the need for third-party services like escrow. Instead, the money is stored in a crypto wallet and automatically released when the buyer and seller both meet their agreed-upon terms and conditions.
But that’s not all. Here are some other ways blockchain can revolutionize the real estate industry:
- Tokenization of property: Tokenization has the ability to democratize the property market, making it easier for people from different financial backgrounds and geographical locations to invest in property.
- Microinvestment: Another benefit of tokenization is microinvestment. It enables landlords to sell off portions of their property, while giving everyday people the opportunity to invest in luxury real estate by purchasing tokens.
- Streamlined transactions: Smart contracts make it easier for buyers and sellers to complete their transactions in a shorter time frame. Moreover, smart contracts keep both parties protected against scammers.
- Easier access to records: Since data is stored directly on the blockchain, leases, title deeds, debts, and old liens can all be recorded in a decentralized location that’s easier to access. This makes it easier to access tenant data, property repair history, and more.
Overall, blockchain aims to make the real estate industry work more efficiently. From better protection against fraud to creating easier access to data, blockchain has the capabilities to change the way government and private businesses navigate the real estate industry.
Key Players in the Industry
As of right now, there are only a handful of businesses looking to bring blockchain technology to real estate.
Propy, Inc. is arguably the best-known real estate company exploring blockchain technology. They have already started building the infrastructure for buyers, sellers, brokers, and agents to conduct on-chain transactions.
Escrow agency JetClosing is also looking at how they can use blockchain technology to speed up real estate transactions.
The good news is that the real estate industry has been relatively quick to embrace blockchain and other forms of advanced technology. As such, we should expect to see noticeable changes by the end of 2019 and witness a complete transformation in the next couple of years.
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