Let's consider one instance to understand how a smart contract works. Bob wants to buy a house from Alice. They create the agreement for buying the house on a blockchain platform using a smart contract. The agreement might seem like this: "When Bob pays Alice 15000$, then he automatically gets the ownership of the property."
So, Bob can rest assured about transferring money to Alice for the property. Bob and Alice would have to pay extra charges to third-party firms, lawyers, house brokers, and banks without smart contracts. Essentially, in this case, they do not have to deal with commissions, delays, a broker, and a legal expert to process the request and complete the agreement.