Blockchain has taken over every realm and industry imaginable with the introduction of cryptocurrencies, NFTs, IoT, etc. in recent years. Blockchain is essentially a technology that facilitates the permanent storage of a digital ledger of contracts, transactions and other information, which can be accessed by a network of intended users. With the advancements in blockchain technology, it has also found its way into the future of the real estate industry and is set to revolutionize the way real estate transactions take place worldwide.
In this article, let us explore how blockchain technology will impact the future of the real estate industry.
How Blockchain Technology would Impact the Future of the Real Estate Industry?
1. Smart Contracts
The concept of smart contracts was introduced back in 1994, which is essentially a computer protocol that can be used to facilitate and verify the enforcement of a contract. Smart contracts can revolutionize the real estate industry in more ways than one; smart contracts can be tracked in real time, they offer facility to automate real estate transactions, can be used for securing e-signatures and time stamping documents, and can also be set to self-execute. The introduction of smart contracts in real estate can eliminate delays in contract execution, time and non-performance while at the same time ensuring security and efficiency.
2. No Intermediaries
The real estate industry is one that involves intermediaries and middlemen at every point in the transaction such as bankers, brokers, lawyers, etc. for the purposes of payments, listing and legal compliances. With the adoption of blockchain technology in the real estate industry, the role of these intermediaries will be considerably minimized. This can prove beneficial for buyers and sellers alike as they stand to gain from transactions by saving on commissions, fees, brokerages, etc. as well as avoiding undue delays in time as well.
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3. Platforms & Marketplaces
A major component of the real estate market would be the marketplace or platform for buying and selling real estate properties. Having blockchain technology facilitates the use of trading platforms and online marketplaces for buying and selling in real estate. This can be done by way of tokenizing real property and trading the same online similar to stocks on trading platforms. Blockchain technology can impact the future of the real estate industry by enabling the creation of tokens on real estate or to be used as currency to be traded in the application or complete the transaction in the application.
4. Fractional Ownership
One of the biggest changes that blockchain technology can impact the future of the real estate industry would be the introduction of fractional ownership. Fractional ownership, as the name suggests, implies ownership of fractions or tokens of a property with the help of online marketplaces and trading portals. The biggest challenge to real estate ownership is the availability of necessary funds to invest in it. With fractional ownership, this impediment is done away with and opens the doors of real estate investment to all.This will be the best option for people who are opting for budget friendly villas and apartments.
5. Costs
With the elimination of middlemen and automation of processes in real estate transactions, there can be huge savings in costs with blockchain technology. Commission, fees, brokerage, transaction fees, registration fees, loan charges, costs of inspection, etc. can be reduced to a considerable amount with the help of automation. This levels the playing field for individuals and smaller players in the market to take an active role in real estate investment, which has hitherto been dominated by global giants and big businesses.
Also Read: Real Estate Industry to Become the Economic Piller for India in 2022
They say the early bird gets the worm. Much like so, changes and advancements are part of every industry and field. It is upto the players and the public to get on board with the latest developments and not risk the chances of obsolescence. Blockchain technology is the future in many aspects and it shows promise in the field of real estate as well. Tokenization, cryptocurrencies, fractional ownership, etc. would be the lingo and the norm in the years to come.
