What’s considered to be the backbone of cryptocurrencies is slowly making its way into other industries as well. Companies are slowly waking up to business transformations possible with blockchain technology. From financial companies to healthcare providers, businesses are trying and experimenting on ways to implement blockchain technology to tighten their processes.
However, what nobody saw coming was the onset of blockchain in the real estate sector. An industry known for its offline and paperwork processes is increasingly interested in deploying blockchain technologies to streamline its processes.
Research conducted by Deloitte to study the reach of blockchain technology across industries reveals that over 53% of its respondents are making this technology a critical part of their operations. Besides, the study also sheds light on strong investments blockchain technology is receiving. Investors are ready to pump in over $5mn for blockchain initiatives, resulting in a 40$ growth from last year’s statistics.
This was bound to happen as real estate is one of the sectors that needed a desperate overhaul. For the uninitiated, real estate agents and consumers face a number of plaguing concerns like:
Not anyone can be a part of the real estate industry as it demands someone to meet a lot of criteria such as financial backing and requirements, healthy credit scores, proper accreditation, citizenship and more. Besides these, there exists a hazy cloud around the real estate sector that prevents anyone from getting access to a solid database where one could get information to help their selling and buying decisions. This lack of clarity makes people skeptical in venturing into this industry.
A report by the FBI claims that Americans lost over $150mn on real estate scams in the year 2018 alone. Comparing this to the reports from 2015, the scams have skyrocketed by 1000%. If you notice, real estate is a sector that runs on trust and intuition. Because of this, this industry attracts an increased risk of fraud.
While there are increasing costs of apartments and plots on one side, there are also ancillary charges that sort of become mandatory like taxes, broker commissions, attorney charges and more in the real estate sector. The booming prices along with these inevitable essentials make this industry an expensive one.
Apart from these factors, other factors like lagging transaction speeds, the presence of multiple intermediaries and tedious paperwork make it hard for people involved in real estate to offer a streamlined service to customers. Customers, too, find it difficult to complete the transactions and processes hassle-free. That’s where the most recent disruptive technology could help.
If you didn’t know, blockchain is a decentralized ledger that keeps a digital record of all transactions. Some of the crucial reasons blockchain technology will take the real estate industry to the next level is because of the following reasons.
- Swift settlements
- It’s decentralized, meaning there is no single person of authority but a group that manages every transaction
- More secure with an advanced encryption system
- The presence of smart contracts that eliminates any 3rd party or an intermediary from being part of the transaction ecosystem
- Public availability of transactions
- Transaction information that cannot be altered, modified or discretely removed
Once you venture into blockchain app development and deploy that in your real estate business, you would make property search easier for your potential customers. Because people in your target market like brokers, tenants, buyers, sellers and owners opt for subscription-based marketplaces for listings, it requires constant updates from their side to get to actually see the details about a property listing. This again comes with subscription charges and inefficient processes.
This can be dealt with blockchain implementation, where an app based on this technology can allow for data sharing over a P2P network. This way all the members in the network can access the data.
One of the major aspects in real estate property purchase is the diligent verification of property documents and papers. To avoid any hassle in the longer run, associated parties involve intermediaries to get paperwork sorted beforehand. Even after due diligence, there exists a scope to tamper with paperwork, tying back to real estate frauds we read initially.
To avoid instances like these, blockchain technology can be implemented as it offers a decentralized platform for users to store and retrieve property documents. Since the platform is closed and secured, no intermediary can also modify the contents of the document or tamper it by force. This prevents probable frauds and also helps in property evaluation.
In the conventional real estate ecosystem, property management is essentially carried out through paperwork, involving intermediaries and stakeholders. With blockchain technology, the market can make good use of smart contracts to serve a number of purposes like digital filing of maintenance requests, signing of lease agreements, cash flow regulation and more. Besides, smart contracts can also facilitate transactions between owners and tenants, where when a smart contract ends, tenants are automatically paid back their security deposits.
Apart from these crucial areas in the real estate sector, the application of blockchain technology can further strengthen areas like
- Real estate investment through tokenization
- Deed management
- Financial evaluation and more
This write up is not to sound ambitious about blockchain implementation. It’s more thought out to shed light on insights that people hardly know. These pointers are not anticipated trends in the real estate sector but practical examples. As we speak, companies are making the best use of blockchain technology to revamp their real estate business.
If you didn’t know, companies like Brickschain, Harbor, PropertyClub, Atlant, Propy and more have already jumped onto the blockchain bandwagon. And if you’re someone looking to venture into this, we suggest you get consulted from a prominent blockchain app development company.
Speaking to blockchain app development service providers will give you an idea of how your business can leverage the potential of the technology and if there are areas that could be personalized to meet your business’ unique needs.
That’s why we recommend getting in touch with us. Having a thorough understanding of the blockchain technology and a team to back this statement, we will ensure your business only benefits from this technology. For all your questions on transforming your real estate business with a blockchain app, Get in touch with us now.