With the influence and disruption that Blockchain has had upon numerous financial services, across multiple industries, it’s hard to find an industry which is yet to adopt, or at least begin to, adopt. One of those industries, however, is the real estate industry.
Whilst it hasn’t quite escaped the disruption of blockchain, it is yet to fully welcome the adoptance of cryptocurrency into its fold. Real estate is a relatively traditional market, with transactions often being conducted in face-to-face meetings as opposed to online or virtual payments. However, cryptocurrency and blockchain are set to look at ways in which this can be changed. Let’s take a look at the ways in which blockchain has, so far, changed the way in which the real estate industry operates.
Markets and Platforms
Traditionally, technology used in real estate has been focused around the listing aspect and connecting buyers with sellers. However, blockchain has been introducing new ways in which real estate can be traded. ATLANT has recently developed a platform which uses technology within the blockchain to facilitate transactions for rental properties and purchases. When real property becomes tokenised, assets are then able to be traded much more like stocks and transactions or payments can be made online.
Removal Of Intermediaries
The real estate market typically involves many different parties to ensure all purchases or leases are carried out successfully. From brokers and landlord solicitors, to banks and surveyors, all of these people play a part in the movement of real estate. Blockchain, however, may soon cause a shift in these roles. New trading platforms will, in the future, be able to carry out functions such as managing payments, listings and securing legal documents. By cutting out intermediaries, this can then result in both buyers and sellers getting more for their money as they will be able to save on the commissions and fees charged.
Decentralised Network
The sole use of blockchain commands both trust and security – it is a network that is highly secure, and for good reason. Information stored within this blockchain is accessible to people within the network, which makes the data completely transparent. If we look back to the housing crash in 2008, then it’s easy to see how the lack of transparency caused catastrophic consequences. Whereas, a decentralised network has trust built in.
As the information is visible and verifiable to buyers and sellers, both parties can have more confidence in the transaction. Any attempts of fraud, hacks or broker scams are instantly dissolved and smart contracts have more enforceability.
Costs
The transparency that comes with using a decentralised network can also greatly reduce costs that are associated with real estate transactions. As well as the savings that can be made by cutting out the professional fees and commissions that come with hiring intermediaries, buyers and sellers can also save on inspection costs, registration fees, loan fees and taxes that are associated with the real estate market. As platforms begin to automate these processes and transactions, these costs can be reduced or even eliminated completely from the process.