Real estate versus blockchain
Blockchain technology is often associated with financial services first of all but it is only one of the industries influenced by it. Not only cryptocurrencies and initial coin offerings have become a breakthrough in the world of blockchain since many other industries like food supply and the protection of the environment have benefited from blockchain solutions too.
No wonder that the world of real estate has been subjected to the impact of blockchain disruption as well. Earlier, it could seem a miracle to buy or sell estates for precious digital assets, but currently, a good deal of real estate transactions are processed via digital channels. Previously, almost any real estate transaction resulted in an awesome event when several parties met and processed a transaction online in an old traditional way. Blockchain has introduced a new direction in real estate. Thanks to smart contracts, properties offered for sale can be represented as tokens and traded like any other asset. Sounds unbelievable? Let’s have a closer look at 6 ways how blockchain technology is changing real estate and why it happens.
Platforms and marketplaces start supporting real estate transactions
Online listings have become a popular way of advertising properties for sale and were originally used to connect buyers and sellers. With the introduction of blockchain technology, all online platforms dedicated to listings and marketing have been provided with an opportunity to process funds in real estate transactions. One of such solutions is ATLANT that developed a solution that facilitates transactions connected with real estate purchases and rental. Therefore, real estate tokenization has opened new possibilities in the industry making it possible to trade properties like stocks and processing funds for homes for sale online in a fast and secure manner. ATLANT has provided users with such an opportunity and liquidates a newly added real estate asset through a token sale on the platform.
Absence of intermediaries
There are lots of parties who try to benefit from real estate transactions. All the brokers, banking institutions, and lawyers make up integral parts of the whole ecosystem and take commissions paid additionally. However, the Deloitte report supposes that all these intermediaries can be skipped with the help of blockchain technology. New ecosystems built on this basis will be provided with lots of different functions including listing, payment processing, and legal documental assistance. It will prevent buyers and sellers from paying extra fees and speed up the process excluding middlemen.
Real estate has been referred to illiquid assets because of the time period required for concluding a deal. With cryptocurrencies, everything happens much faster since they are traded instantly on crypto exchanges. Real estate can be traded much quicker if it becomes a token. Sellers do not need to waste their time waiting for buyers who have enough funds for the property sold.
Support for fractional ownership
One of the unique achievements for real estate brought about by blockchain is lowering the minimum investment amount. You will agree that only possessing significant amounts of money people can afford to buy estate. With blockchain opportunities, investors receive a chance to obtain fractions of the tokens for sale which results in lower maintenance and leasing costs.
Another benefit from fractional ownership is no delays in getting quick access to cash invested in property. Users can easily offer this token for sale as well as use it as collateral if they want to get a loan and continue owning it.
Blockchain has gained trust all around the globe thanks to its decentralized nature. Everyone can access the information stored there making all the transactions transparent. There is no chance to change the record in the history of the transactions, so it resulted in global trust from lots of blockchain enthusiasts all around the globe. Such transparency allows both sellers and buyers to access verified information and be confident in the transactions made. It will also result in fewer fraud attempts and lead to a higher level of security in the real estate sphere.
One more important achievement of blockchain is the possibility to lower real estate transaction costs. Not only a minimized involvement of intermediaries but also lots of other additional fees like costs of inspection, registration, loan, and taxes can be eliminated or even removed fully too. Naturally, some of these costs may remain depending on the destination of the deal and local laws, but it still will lead to more automated processes and reduced costs.
The real estate industry is estimated at trillions of dollars and it can be a great boost for blockchain technology. A bigger number of people will get an opportunity to benefit from this market due to the security, transparency, and equitability of transactions. There are high chances that real estate deals will become P2P activity powered by blockchain and the majority of responsibilities performed by people will be performed by technology.