How Blockchain Technology Would Transform the Real Estate Industry
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Bitcoin is still the most exclusive headline everywhere in the tech world; however, there is a little attention over the underlying technology —Blockchain. The technology of blockchain can transform several industries, including real estate, to turn the related processes and transactions more transparent, modern, and well-organized.
So, what are the advantages of using blockchain?
Typically, when transferring money in an overseas account, the transaction would include an additional fee charged by your financial institution. The party at the other end will receive it after the complete verification, which may take a few days.
But Blockchain is here to change the whole story. It allows transferring assets digitally without any requirement of a central authority that verifies the transactions. There is no need of middlemen, which means faster transactions and no commission-cut.
And in spite of no involvement of a central authority or middleman, the whole transaction is permanently recorded on a public ledger, which means things will be utterly transparent, accurate, and secured.
Also, using the blockchain technology in real estate context will reduce legal and title related costs, as well as quicken settlement processes.
The key impacts of the blockchain technology on the real estate industry
As of now, most of the real estate related transactions aren’t completely transparent because of the involvement of several middlemen like brokers, inspectors, lawyers, notary public, escrow companies, etc. But, here are the ways Blockchain helps in forming a completely transparent real-estate buying-selling process.
Keeping Middlemen Away
There is almost no case of property buying and selling in which middlemen aren’t involved. Sellers and buyers generally experience a single instance or two of buying-selling property, but middlemen do it routinely. They hold the access to the information that sellers and buyers don’t. They also have licenses that are required in operating in the tradition property ownership transfer ecosystem.
The involvement of middlemen often costs both partiers –seller and buyer— a commission. But the technology of blockchain can help them distribute databases where anyone is able to record information, without any need of censoring it, and without any need of the permission.
As of now, the property title is a piece of paper, but when you want to transfer it or own it, you have to go through a variety of processes, sign a deed, get it notarized and then send this paper to your local government office to be stored in their database. With the blockchain, it will happen almost instantly, in real time because there would be no involvement of third-parties.
The typical property title transfer process involves several challenges. So even if it has been digitized, it’s not difficult for scammers to show someone else as the owner of a property. Criminals can trick systems to fake the title ownership by using editing software to stipulate the transfer. Also, with the reinvention of the technology, copying stamps is no more a difficult task.
But, with the blockchain technology, it is impossible to temper with the proof of ownership, proof exchange, proof of transaction and proof of existence.
In fact, blockchain is meant to replace the currently implemented digital technology which can be hacked, modified, and destroyed with intentional efforts. Based on the decentralization of records, Blockchain is a distributed ledger system so that no one can erase it.
The Smart Contract Based Transparency
There are few people who buy properties outright. In most property buying cases, there is the involvement of mortgage or loan. Getting it approved is a quite slow process and is associated with several administrative issues. But the process can become much simpler by creating contracts based on the blockchain technology. Experienced blockchain developers with strong knowledge of the blockchain technology and the ethereum development can develop the smart contract blockchain technology for real estate agencies.
The technology of blockchain can also be used to overcome barriers within the MLSs as they are notoriously fragmented. In U.S.A alone, there are between 700 and 800 MLSs with no existence of a national MLS. Blockchain can be used to provide a securely share data. It can serve as a base for a secured, share, and nationwide database that provides real time access to the information of properties.
Title information and records can be decentralized. Title information is stored locally and even offline. Blockchain brings it all online with the desired level of security and shareability.
Blockchain can be prepared to provide a central title database for an entire country. The whole data can be decentralized, transparent with no chance of being tempered or modified.
A few real estate companies that have started to transact property buying and selling using the blockchain technology:
It’s a real estate start-up which has introduced blockchain and smart contract to solve the problem of purchasing property across borders.
Propify is another blockchain based real estate start-up that curates, qualifies and publishes the real estate content on its own unique platform.
Rentberry has quickly shifted to sell BARRY tokens with its goal of making property transactions between landlords and tenants fully decentralized with the use of Blockchain technology.
Based in New York and built on Ethereium, ShelterZoom is an offer and acceptance real estate solution. The company is currently in the phase of completing the beta testing in Australia and has plans to formally launch its services in coming months.
Author Bio: Sofia is a digital marketing expert in Rapidsoft Technologies, a leading Blockchain development services Company which provides Software for Education, Automation, Construction and Finance across the global. She loves to write about latest mobile trends, mobile technologies, startups and enterprises