Real estate emerges as the world's largest asset class. The revolutionary effect of blockchain use cases on retail and industrial property purchases, payments, and access to real estate funds and investment opportunities is being recognized by commercial companies and real estate professionals.
Blockchain in Real Estate
Today’s real estate market comprises a complex network of independent and interdependent participants that cause transactional friction across processes and systems. Blockchain app development presents a practical solution to realize the following industry benefits:
- Real estate assets are being tokenized
- For underlying industry operations, process efficiency is essential
- Process automation results in lower costs
- Access to asset distribution around the globe
- Due to ownership fractionalization, access to a larger pool of investors is available
- Access to opportunities on the secondary market
- Increase accountability and inform better investment decisions and portfolio management by making data more available
Blockchain's Potential in Real Estate: Emerging Use Cases
Increasing Liquidity
Increased liquidity is one of the best use cases for blockchain in this real estate industry. Blockchain technology can be used to build a platform where real estate companies can sell and buy assets.
Individuals who invest in real estate assets may also list their properties to increase their visibility. Anyone who wants to list their assets on a public blockchain platform can do so. They would, however, have to go through an authentication process to verify their history and rule out any potential scams.
However, providing a forum for buying and selling real estate would make it easier to link potential buyers with sellers.
Also, Read | Implementing Blockchain Smart Contracts in Real Estate
Property Purchase and Sale Automation
The method of purchasing and selling real estate takes a long time. The pricing, as well as the brokers' fees, will adjust during this period. With all of the problems, the sector is rapidly slipping behind. As a result, smart contracts in real estate will simplify the process of buying and selling homes.
Blockchain has the potential to automate the entire home-buying process. Consumers can access a website where potential sellers can showcase their assets. Once they've decided on one, they can either go see it in person or take a virtual tour. They just have to set up the conditions and process the payment after that, and they're done.
Also, Read | Blockchain Smart Contracts in Real Estate: A Long-Awaited Breakthrough
Defending Against Title and Deed Fraud
The avoidance of deed and title frauds is another blockchain real estate use case. You won't believe how many problems deed fraud has caused in the last ten years. This type of fraudulent activity is on the rise, particularly in the realm of online property sales. People may even sell their properties to a third party without your knowledge, which is frightening, to begin with. However, no third party can take ownership of your properties because blockchain can hold all of the property records, owner information, and legal documents on the ledger.
Ownership and Fractional Investing
This is yet another inventive use of blockchain technology. Real estate companies may deliver fractional investment options using blockchain technology. It usually means that several owners will own a portion of a property that would be unaffordable if purchased separately. As a result, if the middle class wants to invest in a high-priced home, they can share ownership with others.
It's a great way to buy and sell real estate because it allows more people to participate than normal, increasing the total liquidity choices.
Smart contracts for real estate can be used to speed up transactions and save time.
Token-based Ownership
One of the most innovative blockchain real estate use cases is this. It's a unique perspective on all real estate properties. Tokens, for example, can be used to invest in a wide range of properties. As a result, the tokens will serve as a representation of the assets' worth. So, rather than owning a particular property, you will invest in the tokens that will reflect a group of that property.
As a result, it's more akin to investing in gold, which carries very little risk. In reality, several projects for this form of application are already in the works.
Also, Read | How Blockchain Simplifies The Real Estate Investing
Mortgage Fraud Prevention
One of the major problems in the real estate industry is mortgage fraud. In reality, as property values rise, the number of people who commit this form of fraud rises as well. As a result, the industry will continue to suffer losses in the billions of dollars. Every year, this fraud costs the United States $2.5 billion! Can you believe it? However, if you start using blockchain for real estate right away, you will avoid this form of fraud. No one will be able to get through the system without being detected because it will be tracked online.
Also, Read | How Blockchain can Pragmatically Revamp the Mortgage Industry
Transparent Property Inspection
There are issues with land inspections. Property inspections cost buyers more than they cost sellers. Many real estate scams, for example, provide the buyer with a fictitious home. In certain situations, investors invest in real estate not to live in it, but to sell it at a higher price later. As a result, they may be unaware that the property they purchased does not exist. However, converting to blockchain for real estate will provide accountability in property inspections. There is no way to game the system here, and you will be able to find the right property to invest in. Furthermore, you can view the property's history and any problems directly from the website.
Cost-cutting in Real Estate
This is by far one of the most successful use cases of blockchain in real estate. Companies who begin to integrate blockchain into their networking infrastructure will be able to simplify the entire process and greatly reduce costs. Furthermore, it will not be limited to just the corporate level, but will also benefit customers.
You won't have to pay additional fees to purchase assets until blockchain replaces the middlemen. The radical change in the intermediary model would result in lower cuts as well as significant time savings.
Also, Read | How Blockchain Can Influence Real Estate Investing
Final thoughts
Blockchain for real estate is an area that needs more global visibility. Corruption and illegal activity abound in this industry. However, the significance of this industry is at an all-time high right now. As a result, without proper guidelines in place, this sector would not be able to thrive and eradicate corruption for good.
It needs a change, and blockchain is definitely up to the task. Therefore, it’s only a matter of time when real estate companies will see blockchain’s worth and start mass integrating the tech.
If you are in the real estate industry and want to explore blockchain in detail, we will recommend connecting with our blockchain experts.