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Blockchain in real estate: its advantages and reasons to integrate one

It is not easy to be a real estate agent since this job requires a lot of efforts and agents need to work with a pile of papers to achieve a required result.

Today blockchain technology is widely used in various fields of activity. And if you think that blockchain is just a part of cryptocurrency, you make a mistake. Blockchain is a much wider conception.

The usage of blockchain real estate can lead to a revolution in this industry. Blockchain technology makes it possible to automate many processes, especially those ones related to funds transactions. Blockchain can monitor this process and it shouldn’t be controlled by the third party. Blockchain records all information in the right order and it cannot be changed afterward. In addition, blockchain in real estate makes it almost unreal for malefactors to hack this chain since it is secured on a high level.

Also, it can be surprising for somebody, but blockchain startups in the real estate sector already exist more than 2 years. And this technology will probably become much more widespread in the near future. And if it is the right time when you plan to order a real estate website development or create a real app, you should get acquainted with a blockchain to think about its integration into your software.

Reasons why real estate transactions remain unreliable

It is worth noting that more than 60% of the US residents see in a real estate sale a profitable way to earn money. At the same time, 72% of residents are aware that transactions performed during the real estate sale are not secure enough, the whole process is very complex and they would like this process to be improved and simplified.

Blockchain in real estate: its advantages and reasons to integrate one

There are a few reasons why real estate transactions remain unstable:

Fraud risk is high

Common contracts that are drawn up in paper form and in digital version can be falsified by light-fingered party, and that is why blockchain can change it once and for all.

A pile of papers

Real estate agents have to spend to much time for a paperwork that leads to substantial time loss and it can also be the reason for a customer loss.

Not affordable

Real estate sector requires large investments and it is not an affordable field for individuals that don’t have a large amount of money.

Too many intermediaries

Transaction process in the real estate requires the participation of a few intermediaries. Not only that it can lead to higher risks of falsification, but it also requires additional fees that should be paid to all intermediaries.

Info can be inaccurate

It is rather difficult to get all realty information even if you pay for this, and often the information can be incomplete or inaccurate. Dishonest real estate agents can provide you with invalid information.

Advantages of blockchain in real estate

We have just seen what pitfalls real estate sector has and what weak sides it has, so it is necessary to figure out what benefits blockchain brings to the real estate and why it should be integrated into a real estate software.

Blockchain in real estate: its advantages and reasons to integrate one

Real estate property search is simplified

Have you heard something about multiple listing services aka MLS? These services make it possible for real estate agents to search a required property, rental rates, particularities of property and so on. But the usage of MLS requires additional fees according to its terms, but the data specialists can find is not always up-to-date. Lack of standards for proper real estate data arrangement leads to falsified information since it is controlled by real estate brokers that can make changes as it is convenient for them. As a result, property owners and renters can be doubtful concerning a new bargain because the information from ML can be invalid.  

But blockchain integration revolutionizes this process. Using P2P network, all real estate data can be exchanged. In fact, everybody will be able to access data for free and it will lead to serious costs reduction. And cost efficiency is considered to be one of the biggest advantages of a blockchain, not only in the real estate sector.

Legal issues are resolved faster

Of course, you know that in order to buy (or sell) or simply rent an apartment/house, you should resolve all legal activities related to it. it is necessary to hire a skilled lawyer that will inspect all documents to avoid possible problems and misunderstanding after sale or rent is done. Performed inspection is stored in a paper form and concerned parties can change and forge this document.

Apart from this, inspection is performed manually and a further verification process includes a participation of a few specialists. So the price for inspection becomes higher. Whereas blockchain application leads to digital storage of these documents on special platforms. Data in blockchain cannot be changed and all paperwork can be implemented automatically, so inaccuracies and fraud become impossible.

No intermediaries required

As we noted above, a conventional process of a real estate sale or rent includes many specialists, and it is a reason why the cost for these services is rather high. That is why many investors look for other fields to make their money work since a real estate field requires too many additional fees.

Blockchain makes it possible to reduce the number of intermediaries almost to naught. Since many processes become automated and don’t require human participation, intermediaries’ services are unnecessary.

Smart contracts improve the bargaining process

Conventional agreements and contracts are drawn up by hand on computers and each party can cheat and lead an unfair game. But not with blockchain. Blockchain allows real estate agents and property owners to create smart contracts that monitor the fulfillment of all obligations. The smart contract makes it possible to trigger all payments automatically and if one obligation is not fulfilled – it doesn’t allow a party to move further.

Transactions are transparent

Due to blockchain technology, fraud becomes impossible and all transactions are transparent since blockchain is a distributed technology and it is decentralized. Each part of an information is stored separately in one block.

Liquid investments are possible

Investment in the real estate sector considered to be illiquid before since such investments can lose their value and become depreciated.

With blockchain, all investments turn to be liquid due to transparent records and smart contracts, and a complete absence of paperwork. Also, trading for investors to become more reliable and comfortable.

Cryptocurrency gets in there

All investors now can start using cryptocurrency to make investments or buyers can use it to purchase a property. Verified cryptography is used for storing keys for accessing to all funds. Simple transaction and genuineness verification of virtual coins make working with cryptocurrencies much more beneficial than the use of conventional currency.

Blockchain technology is a real magic wand that can modify all fields of activity, not only real estate. The only thing you need is to hire an experienced software development company that will integrate blockchain services into your web or mobile app. So just be clever and follow the right road!

About the Author:

Nataliia Kharchenko is a Technical Writer at Cleveroad. It is web and mobile app development company in Ukraine. We are focused on helping startups, small, and medium businesses create competitive and winning software. I enjoy bringing a digital world closer to people and writing about technology, mobile apps, innovations, and progressive management models.

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