The success of a firm is inevitably influenced by any technology, idea, or even somebody who adds significantly to the market by creating new opportunities or providing answers to a problem. One such technology that has the potential to advance the real estate sector is blockchain. Businesses can benefit from integrating blockchain into real estate with the help of a custom real estate web development company.
Real estate is one of many industries, including insurance and online quotation, banking, website security, and more, that have acknowledged the relevance and advantages of utilizing blockchain technology. One of the most precious and significant asset classes in the world, real estate, has recognised how blockchain can be the ideal technological tool to address the bulk of current industrial difficulties.
You’ve come to the right place if you want to learn more about how the real estate sector uses blockchain or how the technology helps it address pressing concerns. Read on!
What Challenges Are Faced by the Traditional Real Estate Industry?
Let’s look at some of the significant problems that this traditional legacy business has been facing before we start enlightening you about the benefits of Blockchain in Real Estate.
- Restricted Access
Real estate has traditionally been a market that only the wealthy could enter. More people have desired to invest in real estate because of the enormous quantity of passive income and capital appreciation it provides. The obstacles to entering the real estate market, however, have been too great.
The obstacles are too numerous, ranging from citizenship to credit score, funding to having international bank accounts, accreditation to cash needs, and access to the appropriate managers and sponsors. Additionally, if you want to invest in a different nation, dealing with several middlemen and taking a lot of time to see the property or conduct local research might be a nightmare.
- High prices
Real estate investing requires paying exorbitantly expensive fees, such as broker fees, exchange fees, attorney fees, taxes, transfer fees, investment fees, etc. due to the participation of several middlemen. Rest assured that hiring an accountant or attorney to keep your tax returns in order will result in additional costs.
Real estate investment gets very pricey as a result of all these fees adding up.
- Transparency Issues
Although it may be difficult to believe, there is no direct method or market database available to get the data required to make a real estate buying or selling decision. Yes, the lack of reliable market data makes the real estate sector murky and opaque, making it impossible to combat tax fraud, money laundering, and other corruptions related to the real estate sector.
Can’t imagine the extent of fraud and corruption in the real estate industry? Then the Panama Papers example would come to mind!
- Low-Speed Transaction
Several people are involved in real estate investing. And because so many people are involved, the processes here have awful transaction speeds.
Let us give you an illustration of how lengthy a real estate transaction might take. Consider that you are considering investing in the real estate sector. Even while it can take almost six months to find the appropriate home, it will undoubtedly take another six months to complete all the necessary processes in order to acquire it.
- Limited Liquidity
Liquidity refers to how quickly an asset or investment can be converted into cash. The real estate market has several difficulties, but one of the largest is that real estate investments are notoriously difficult to convert. Investments in real estate are not as liquid as those in cryptocurrencies.
Because real estate is not open to all, the entry barriers are too high, and you can’t easily put real estate on a public exchange and sell it immediately during open hours, the number of buyers is limited in real estate as opposed to cryptocurrencies.
- Tedious documentation
In the traditional real estate market, a lot of transactions include tedious and time-consuming paperwork. Real estate firms have frequently lost potential clients and money as a result of the cumbersome process.
- Existence of Middlemen
Middlemen or intermediaries have always been a part of the real estate industry. To invest in the real estate market, you must interact with everyone from brokers to lawyers to banks, which frequently results in paying exorbitant fees and commissions demanded by the middlemen. In addition to making both buyers and sellers lose money as a result of the middlemen’s involvement, the processes become significantly slower as a result of their constant back and forth.
- Fraud Risks
The trust in the real estate industry is founded on both documents and people. Yes, there is nothing else that can give you security for your investment besides the property agreements. And the likelihood of fraud is increased by the use of only paper-based property agreements. For instance, it is believed that California accounts for 24% of all mortgage-related fraud charges in the US.
Blockchain’s Impact on Commercial Real Estate
The CRE, or commercial real estate, business has recently adopted blockchain. Blockchain-based smart contracts are expected to play a significant role in the CRE business. The use of blockchain in commercial real estate can alter important processes such as sale, buy, leasing, financing, and other property transactions, including transaction management. Consider the different potential that blockchain technology can provide for the commercial real estate business.
- It has the potential to improve the overall property hunting process.
- It can aid in making wise decisions. It can improve transparency and security during the buying or selling process.
- It has the potential to expedite pre-lease due diligence.
- It has the potential to make property title management more affordable.
- It can help with cash flow, leasing, and property management.
For commercial real estate owners, this technology has enormous potential for efficiency, transparency, and cost savings. Blockchain for commercial real estate is becoming more important than ever, removing many of the obstacles and inefficiencies in the primary procedures.
Making Things Easier with Blockchain in Real Estate
Aren’t you fascinated about the various aspects of the real estate sector that are being revolutionized or could be transformed by blockchain technology? Then, below are some of the primary Blockchain Real Estate Software Development applications that can be improved beyond conception.
- Property Lookup
There are numerous property listing sites accessible today, such as Zillow. Buyers, owners, tenants, and even brokers use these sites to find property information.
These subscription-based systems, however, not only charge exorbitant prices, but also supply property data that is out of date, erroneous, and even substantially twisted. However, by decentralizing data, a blockchain-backed real estate software can eliminate all of these inefficiencies.
Because data is disseminated in a peer-to-peer network with blockchain, market players will be able to get credible data at a significantly lower cost, while brokers will have more control over their data.
- Property Administration
Property management processes have long been seen as somewhat of a complex task in traditional real estate due to the involvement of multiple stakeholders. Even all property management information is restricted to a single person or database since management processes are carried out on paper or through independent software. However, blockchain has the potential to simplify the entire property administration process.
Property management operations such as signing lease agreements, setting up lease payments, filing maintenance requests, regulating cash flow, and transferring security deposits can be automated using blockchain-based smart contracts.
- Management of Deeds
Another area where blockchain is having an impact on the real estate apps market is deed management. Property titles are now paper-based, which increases the potential of fraud and inaccuracies. According to the American Land Title Association, over one-quarter of all land titles are defective during transactions.
A faulty title renders the deed management process illegitimate. In such circumstances, the property owner must either wait for the title issue to be resolved or pay exorbitant legal fees to assure legitimate and accurate property titles.
However, because blockchain provides immutable digital records, the entire process can be made secure and transparent.
- Investing in Real Estate
When real estate platforms use blockchain, the investing process can be expedited as well. The limits of investing in real estate can be overcome by utilizing the concepts of fractional ownership and tokenization.
The Last Wise Words
Don’t know whether blockchain is good for your company?
So, if you want to strive for a one-of-a-kind sharing platform or streamlined procedure with less risk and greater transparency, your company needs blockchain.
Blockchain technology is thought to provide new doors for potential investors to enter the real estate market. This technology, which increases the real-world utility of tokens, is likely to be extremely advantageous to the crypto-space.
