The way internet redefined the way we share information and communicate is the same way blockchain technology will redefine how real estate transactions are done. Blockchain was created to support cryptocurrency bitcoin; it has tremendously grown over the years.
Blockchain technology allows for the first time companies and people to make large transactions without the need for an intermediary. For years’ real estate transactions such as the amount of time to close deals, access to deals, high fees, and property title mistakes have held back the industry for a long time.
This tech presents opportunities for the innovation and efficiency of real estate. In this post, we shall highlight three innovations that will forever change the landscape of how real estate is done in 2019.
Tokenization
Tokenization has transformed the sphere of ownership, in the past owning lucrative and expensive assets required investors to be very wealthy and be patient enough to wait for years before being able to liquidate.
Tokenization has changed all that; it has democratized ownership of assets by employing cryptocurrency that divides your assets into tokens which are in turn stored in the blockchain. Investors now have the luxury of reselling their shares on the open market through secondary trading.
It has also allowed people in different tax range or geographies have access to attractive and lucrative investment opportunities that they would not have in the past. For example, if you are a landlord at Parc Esta, you can effortlessly sell a percentage of your property to the public.
Smart Contracts
Property agreements have a lot of middlemen and moving parts. Transactions that use smart contracts is exclusively between the buyer and seller with no human interaction, real estate transactions are simplified and takes much less time minimizing the chances of fraud.
In smart contracts, the buyer put all of their essential and crucial data in an encrypted and secure block while the seller includes all the information about the property. Computer protocols scan the legitimacy of the transaction, and there is no completion of an agreement until the term and conditions are met.
For homeowners looking to purchase units at Parc Esta, using smart contract will reduce the overall cost of transaction as intermediaries will be taken out of the entire process saving you time and money.
Property Title
The title insurance industry has grown over the years generating revenue of about $15 billion a year. This insurance assures buyers that their properties are clear of debts and liens.
Cities and municipalities have different ways of storing property data; some store their records online while others are old school using printed paper. Blockchain technology facilitates the decentralization of all property title in the city or municipality would save a lot of time and money, and in the long run, it would eliminate title insurance.
Apart from the property article, it would also contain damages and improvements to the title and information about construction. Through this tech, buyers would know truly know what they are buying.
Having titles stored on the blockchain is beneficial for buyers. Unfortunately, inputting data from every municipality and city is tedious, costly and time-consuming. However, blockchain technology is predicted to revolutionize the property market industry.