By: Nicole Parmar
While blockchain technology is still very much in its early years of implementation, I have already seen it change multiple industries. Real estate is certainly no exception.
Blockchain is often associated with cryptocurrency. However, the technology itself has many inherent characteristics that allow it to be implemented as a piece of real estate technology. With the use of blockchain, we can begin decentralizing real estate. This will bring many benefits with it.
Blockchain Equals Less Paperwork
I’ve done some extensive reading on the topic. It is currently one of the most interesting things to me in the world of tech news. One of the big focuses of it is its application in the insurance industry. Its use there parallels how I foresee it being used in the real estate sector.
In either case, it is able to streamline communication during the underwriting process. It also creates a single, trusted repository which lessens the amount of paperwork needed. It also decreases how many times it needs to be collected or confirmed throughout a transaction. Finally, it provides greater coordination for multiple parties as they transfer assets.
Blockchain Removes Third Parties
Smart Contracts are a very interesting development. I know they have huge potential both inside and outside the real estate industry. These Smart Contracts allow contracts, property records, escrows, and other documents to be completed and distributed without the need for an attorney or title company.
A Smart Contract is often compared to the concept of a vending machine in that a person will deposit money and, in turn, the machine will produce a product (document) without the need for human intervention.
Blockchain Is Instantaneous
Manual work processes slow things down with human error and delays. By taking common real estate processes and putting them onto the blockchain, things will speed up significantly through automated processes.
Some speculate that buyers may one day be able to buy a property and complete the sale with a shopping cart system on a website. The blockchain ensures that the person buying the property gets the title/deed and the seller will get their cash using cryptocurrency. It will also record the transfer with appropriate public records offices.
Blockchain Powers Real Estate Investing
I’ve already explained how blockchain can remove the need for title and escrow companies, but there’s also a chance it can handle mortgage transactions too.
Distributed-ledger technology is the backbone of the blockchain. It’s basically a database that lives in multiple places at the same time. This is where Smart Contracts and other transactions are executed without the need for any middlemen to facilitate.
This allows complex real estate processes to be turned into streamlined ones. Real estate sales could be completed in just a few clicks. That’s why experts are telling banks that they need to adapt by implementing blockchain technology. It streamlines their own processes and allows them to focus on creating value-added services that keep them involved and help improve the real estate industry as whole.