It’s no surprise that the adoption of blockchain applications in the world’s most profitable industries is reshaping the global economy. Businesses and customers alike have recognized the massive potential of blockchain technology and are incorporating it into their daily operations.
One sector that appears to have lagged is real estate and property management. The $11.4 trillion industry has been relatively slow to adopt blockchain applications. With recent developments, however, the industry is steadily revolutionizing how sellers, buyers, stakeholders and investors gain better access and transparency.
It is estimated that 2 out of every 200 mortgage applications were falsified in the last year. Property applications based on blockchain tech can assist in streamlining the process to eliminate any illicit activities that may affect transactions.
Companies can easily store transaction details and data on a virtual ledger using blockchain, eliminating the risk of fraud and theft, and creating safer and more cost-effective methods. Following that, businesses can easily review documents for any errors in an application and easily trace historical records for any fabricated or inaccurate information presented.
Utilization of smart contracts
Smart contracts restrict access to digitally stored data to only stakeholders, making it easier for parties involved to complete real estate transactions more easily, quickly and safely.
Blockchain technology, through smart contracts, will enable the automation of transactions, escrow services and title checks, eliminating the need for a middleman. Moreover, prospective investors and buyers will have access to historical data on a property’s ownership as well as any structural alterations done to the property before they can purchase it.
On the other hand, real estate companies will have access to an applicant’s past information, including financial statements, prior lease contacts and employment histories, to ensure they meet the required criteria.
Property asset tokenization
Blockchain technology will allow investors to convert property and real estate into digital tokens for easier distribution across parties. This will help to democratize the industry and boost its accessibility to a bigger pool of potential buyers.
The result is faster transactions and simpler administration of financial elements, such as dividends to appropriate stakeholders.
Increased industry liquidity
The incorporation of Web 3.0 capabilities in blockchain technology is already allowing real estate investors to sell portions of equity in their homes as tokens rather than going to banks.
For instance, an investor recently used an NFT to purchase a residence located in Columbia, South Carolina, at a cost of $175,000. This was the maiden NFT-based home purchase in the United States by Roofstock Chain, bringing together several blockchain players.
This goes to show how commercial and residential real estate can be streamlined to increase equity holdings while attracting a lot more investors.
Although more practical and logical integration within the larger real estate industry is still required, these developments demonstrate that blockchain technology is a versatile and much-needed upgrade to the multitrillion-dollar industry. It has the potential to improve real estate transparency, security and marketing opportunities.
With companies such as Coinbase Global Inc. (NASDAQ: COIN) continuing to grow their footprints in making it possible for people to buy and sell cryptos, blockchain could become a common form of technology sooner rather than later.
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