In today’s world, it’s only a matter of time before blockchain technology will infiltrate the various industries. Among these is the real estate industry. Despite how powerful this new technology is, only a few companies started integrating it into their services.
What exactly is a blockchain? In simple terms, it is distributed database. Through combining and recording transactions in a secure and centralized leger system, it generates a chronological chain of data that doesn’t need any third parties to control it. What makes this technology great is its capability of tracking and authenticating transactions in real time without requiring a middleman.
The blockchain technology has the potential to change any business by increasing its transparency and speed up transactions. People around the world are trying to come up with new ideas and ways to use it.
Let’s see how blockchain can affect the future of the real estate industry.
Smarter, more transparent
The most significant impact that blockchain can present in the commercial real estate is a faster, smoother contract management process that can speed up deals. Automating and instant receiving of payments for a sale or lease agreement can be possible with the use of smart contracts. The best part is that it still works even outside of business hours.
Creating, auditing and authenticating contracts on a real-time basis around the world without any third parties can be possible with the use of the blockchain technology. With smart contracts, one can take the payment upon fulfilling the instructions which can provide transparency to all parties thereby reducing any possibility of payment disputes.
Smart contracts can also affect pre-lease due diligence by speeding it up. The technology allows verification of identities through fast background checks. Parties involved in the contract can acquire access to it via personal digital keys. In doing so, reducing of fraud is possible.
By registering investments via the ledger, ease of process and simplification turns into a reality. This solution is what most blockchain real estate startups want since it is challenging to liquidize assets in the current system.
Easier access to documents
Currently, it is hard to access land titles since most of the information is not online. With the potential of blockchain technology, we can cut the lengthy process of transferring and recording of titles. Even the governments are looking into applications of the secure ledger to access and store historical title records easily.
In spite of its advantages, blockchain technology still has critics. There are questions about the technology’s reliability and security as well as any human error issue since accurate inputting of information is needed to start.
But, as blockchain’s usage becomes more widespread than before, resolution of these issues are underway. When this is finished, the traditional real estate industry will be among the businesses transformed by blockchain technology.
Blockchain can be still in its early developments, but the number of disruptive and innovative cases continues to grow in number as the days go by. It may as well be the most significant advancement found in the past fifty years.