Real estate is being revolutionized by blockchain technology. Though are we actually ready to cash in? In today's time, it's difficult to identify a sector that hasn't been affected by blockchain's disruption of financial services and subsequent extensive deployment across industries. From payments, remittances to foreign exchange, all have been significantly impacted by cryptocurrencies. Though, the blockchain disruption has also affected the real estate industry too. Prior to now, only using digital means to transact high value assets like real estate was unusual. However, Blockchain has made it possible to alter this. Now that blockchain systems have smart contracts, it is possible to tokenize and exchange assets like real estate in cryptocurrencies like ether and bitcoin. Trading in real estate today is a completely new ball game then what it was 20 years ago. So, let’s now look at how this new technology has changed the real estate game for the better. Historically, the main goals of real estate technology have been to connect buyers and sellers and to list properties. However, blockchain has not just opened up new avenues for real estate dealing but also helped in building trading platforms and online marketplaces. Thus, providing a more extensive real estate transaction assistance. For instance, ATLANT has created a platform that enables real estate and rental property transactions using blockchain technology. Where real estate can be tokenized, and after that, it can be exchanged online like equities on a stock exchange. ATLANT: a real estate blockchain platform, enables sellers to tokenize assets, effectively treating it like a stock sale, and then liquidate that asset, utilizing the platform through a token sale. Furthermore, with buyers owning a portion of the property, the accumulated tokens can now be converted into fiat money. The real estate ecosystem has traditionally included brokers, attorneys, and banks. Though in line with Deloitte’s 2021 analysis, blockchain may soon bring about a change in their participation and roles in real estate transactions i.e.: overtime new platforms may take over duties like listings, payments, and legal documents. And by eliminating the middlemen, buyers and sellers will be able to receive more for their money because they would pay less in commissions and other costs. Additionally, by eliminating the back and forth between these intermediaries, the process can be made considerably speedier. Blockchain also brings in the concept of fractional ownership in real estate investing by reducing the barrier to invest. Investments typically require a sizable down payment to purchase real estate. But thanks to blockchain, investors can now have easy access to the trading platform to purchase and sell tokens of any size as they see appropriate. Additionally, fractional ownership would enable them to forgo managing the properties themselves, including leasing and maintenance. Though as a decentralized technology where information stored is accessible to all peers on the network: making data transparent and immutable, Blockchain commands security and trust.
One only needs to go back to the 2008 housing bubble burst to realize how institutional greed and a lack of openness can have disastrous results. The system of a decentralized exchange is predicated on trust. Buyers and sellers can make transactions with greater confidence knowing that information can be independently verified by peers. Not just this, transparency associated with a decentralized network can also trim down costs associated with real estate transactions. Additionally, leading to a decline in fraud attempts. With legislation for admissible records being passed in places around the globe, smart contracts are progressively becoming such documents. And as a result, smart contracts would be easier to enforce in areas outside of technology too.
One of the most well-known incumbents in the area of smart contracts is Propy. Through a set of blockchain-based smart contracts, it has developed technology that enables buyers, sellers, brokers, title agents, and notaries to collaborate in order to complete transactions.
Despite having a value in the hundreds of trillions of dollars, wealthy individuals and major corporations dominate the global real estate market. But with blockchain technology probably more people might have access to the market where transactions can be made more transparent, safe, and equal. And eventually, real estate transactions might genuinely be peer-to-peer activity, with platforms powered by blockchains handling the bulk of the work.
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