Table of Contents

BLOCKCHAIN IN REAL ESTATE

What is Blockchain in Real Estate?

Even though most people think about blockchain technology as a solution looking for a problem, evidence from its applications and use cases proves the contrary. One of the problems of the real estate industry is the transfer of ownership. It is hard to say who owns property because other ways of proving ownership are mostly oral and written, making them all subjective. It is also challenging to know the price of real estate assets without relying on the information provided by a singe individual or company. Doing due diligence for most real estate assets takes so much time unlike traditional stocks and bonds. There are also other crucial problems like weak security and accessibility, high transaction costs, inaccessible data, non-interoperable proprietary software, legal inconsistencies, and fraud. The leading causes of these challenges are fragmentation and centralization. Software used in the real-estate industry are fragmented. They do not interact with each other and the rules are often incompatible. Information in real estate is mostly with the government and brokers in the industry, sidelining key players in the industry. With blockchain development services, we can unify real estate software and decentralize the industry. Real estate software and transactions can be open source can work together in a frictionless way.

If you have ever bought a land or a home, you will understand that the traditional real estate industry is complex. The process of acquiring properties is also complex and risky, with home inspectors, governments, banks and other thirdparties who need to sign and take a fee for endorsing the transfer of ownership. Depending on the country and jurisdiction where you acquire the property, the complexity can be even more. By codifying local, provincial and national housing regulations on the blockchain, smart contracts can simplify the ownership and transfer process. Prospective sellers can simply send a location, price, and other ownership information to the contract which will generate bids, contract, and records that will facilitate the sale of the house instantly. Building these systems can get really complex but adopting blockchain for the real estate industry is indispensable for the future. As a blockchain development company we offer solutions that help governments, companies and businesses to navigate and continue to thrive in the increasingly complex real estate space.

Blockchain solutions have made their place in every field of life, be it healthcare, trade, business, or commerce. The growing applications of decentralized solutions has led people of every field to divert their attention toward using this blockchain solutions for their good. Blockchain solutions have found their innumerable applications in healthcare, where they can be used to keep records of patients, in financial institutions where they can help their customers in raising funds and then distributing them among the people, and in banking, where the user can make a transparent transaction without any further due.

In addition, the blockchain has also found its vast applications in the real estate sector. The fact of cryptocurrencies has a high impact on the foreign market and stock exchange. The real estate industry is not left out disruption of blockchain solutions either. Blockchain has changed the real estate way of business. Before blockchain, the trade of high-value assets was made after face-to-face discussion of both parties, but the introduction of smart contracts in blockchain has brought a change in methods of dealing with assets from person to person to online on a decentralized blockchain network.

Understanding the Real Estate Industry

The real estate industry deals with buying and selling lands and buildings from one party to the other with the help of investors. Most of the time, the real estate asset is an investment. That means the owner may or may not use the property but can use it as a business like they can put that building up for rent. Real estate investment is made through real estate agents and investors.

For example, if you want to buy a house but are not planning to use it, for now, you will need to contact real estate companies and their agents. The agents will give you options, and once you buy that house, you can rent it out or sell it when the price increases. In other words, real estate is a form of tradeable landed property.

Blockchain Technology in the Real Estate Industry

Blockchain in real estate has gained significant interest from property owners, agencies, companies, and property managers, interested in giving their customers unlimited access to their data and a transparent method for real estate transactions. Blockchain in real estate has proven to be an innovative technology that has bought evolution in the industry by the introducing new ways of buying real estate assets, property through the decentralized process, attracting potential buyers, making audit contracts through a diligence process that ensures the security and confidentiality of the platform.

Use cases of Blockchain in the Real-Estate Industry

Management of assets

Blockchain in real estate helps users manage assets. Asset management is done by tokenizing the property and the assets. Tokenization reduces the processing fee by excluding third parties from the process. The reduction in the processing fees of the assets allows real estate asset owners to lower the minimum investment amount, remove barriers to entry, and attract more customers for their projects.

Financing of project

Raising funds has been difficult these days due to the lesser interest of the investors. The use of blockchain in real estate has accelerated the process of raising funds. When dealing with banks as single loan providers, the rate of interest and the amount can be as high as 29%. This amount can be reduced by finding other investors. This problem was resolved by using blockchain in real estate, which enables the user to connect to hundreds and thousands of people who might be interested in investing their money in their project.

Management of real estate property

People dealing with a large number of properties face issues of maintenance of documentation of property due to lack of time. This problem has now been resolved by blockchain experts using distributed ledger technology that maintains all the data of the entire property, fractional ownership, asset management, legal documents, and closing documents in digital form and in an organized manner.

Issuance of contracts

Land titles are based on an extensive documentation process that may lead to misleading or misplaced documents. In addition, the asset transfer documentation process is lengthy and costly. This process and its issues have now been resolved through the introduction of blockchain technology that handles the documentation in digital form that is easy to maintain, safe, and error-free.

Development of Property

Lack of transparency in the supply chain of the subcontracting in the construction and management of the asset has led to a problem for the investors and the asset owner. The issues that were faced by the owners during the property development in real estate were also resolved by the introduction of blockchain technology in the field of real estate. The problem is resolved by using blockchain in real estate, the ability to prove the quality of the goods being used by tracing the origin of their manufacturing.

Payment

Distributed ledger technology enables the user to carry out the payment process and to be paid on-chain. Doing this removes the need for consultation of some custodian banks or involvement of the third party in the process. Moreover, using the key takeaways of blockchain real estate technology has also made transactions of large amounts easy and accessible to all.

Benefits of Blockchain Technology in Real Estate Transactions

The ease of real estate transaction process is made possible through the provision of the smart real estate contracts offered by the technology that leads to the satisfaction of both the buyer and the seller of the asset. The transactions that are made through the use of blockchain technology are done using digital currencies that are more efficient and decentralized. Records of all the transactions are kept safe in the form of blocks and are stored on the blockchain forever. Transaction method using blockchain technology is much easier than the existing systems still used in many places. The following are the benefits of using blockchain technology for real estate transactions:

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Faster Method of Transaction

The use of blockchain for real estate transactions presents a faster method and a better option than tradition physical payment methods. Transaction are made through a peer-to-peer network and is easy and quick. In traditional real estate the apps used for transactions have certain limitations on their usage. For example, some apps limit the amount of money that can be transferred. There are also some apps that do not allow transferring money in the same region. These problems have now been resolved by introducing blockchain technology as the transaction method for the real estate industry. A specialist blockchain app development company can help governments and companies develop applications for real estate transactions that a free from these barriers and limits.

Transparency of Records

One of the biggest plus points of using blockchain technology in real estate investing is the transparency of the real estate transaction records. All the records of the payments made by the national and international real estate investors and real estate investments are kept in digital form that is safe and error-free.

No Involvement of the Third Party

The biggest advantage of using blockchain technology is the omission of validation of the third party with a due diligence process that facilitates transactions in real estate and other processes making the process faster and less costly. Many companies have had to pay millions and billions of dollars to the middle man who connects the assets' investors and sellers. The money paid to the third party is now saved due to the peer-to-peer connection offered by blockchain technology in real estate.

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Real Estate Market And Smart Contracts

Blockchain real estate has given its user the advantage of developing smart contracts in real estate investing. The users can make a smart contract depending on their needs and requirements. Smart contracts are digital forms of an agreement made after the mutual consultation of both parties. The contract is made by keeping both parties' viewpoints utterly dependent upon the parties. The blockchain has nothing to do with the contract. After the buyer and sellers meet and the buyer or investors show an interest in buying the digital asset, they are brought together by the blockchain to discuss the contract. A smart contract is developed with both parties' mutual consent and brought forward before the final transaction. Blockchain real estate also gives the leverage of canceling the contract if the rules of the contract is not followed by parties to the transaction.

Conclusion

Blockchain in real estate has revolutionized buying and selling of real estate assets. The method is much easier than it was before. By doing Blockchain development in real estate, numerous benefits are offered to the customers like easier and transparent transactions, easier documentation in digital form with lesser errors, and an easier method of transferring funds. Moreover, it also helps collect funds by connecting different people across the globe.

Blockchain real estate platform offers many benefits to the real estate investing parties. They are given the ease of smart contracts without a third party. The documents are made independently by two parties dealing with the project without the involvement of a third party. The ease of smart contracts has led to investors' greater interest in using blockchain real estate, which takes up a significant portion of the real estate market. Another main advantage of blockchain real estate is the option of cancellation of the contract at any point in the process. For example, if the points of the contract are not being satisfied by any party, the contract can be canceled without any further due.

The main advantage of using blockchain real estate is its customer-friendly service. If you carry out the process of buying and selling your assets in real, it would take months to first advertise it and then find a suitable customer. This problem has been resolved by introducing blockchain technology in the real estate field. The seller must put up the asset they want to sell on the blockchain. The other people or companies connected on the network will look through the asset, and if the asset is suitable for their needs, they can contact the seller and develop a smart contract and then carry out the process of transaction and payment in the form of digital currencies.

The payment done on the blockchain is in the form of digital currencies. The blockchain real estate transaction saves the user from the pain of waiting for days and weeks for the transfer of money as they have to do while using other apps that have certain limitations. But blockchain leaves its users satisfied with easier and faster payments than other apps. The buyer can transfer money, and the seller can receive it on the same day.

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