How Blockchain Solutions for Real Estate is Revolutionizing the Industry

The advent of blockchain technology has accelerated a positive impact across industries globally. Upholding values like transparency, immutability, traceability, and advanced security it has managed to bring forth significant improvements in the existing architecture of major sectors and continues to do so. In this write-up, we will explore how blockchain solutions for real estate are impacting and revolutionizing the property industry through systematic augmentation.

Blockchain in Real Estate:

Real estate happens to be the world’s largest asset class. As per market study reports, in 2018 the global real estate market was valued at 6.8 trillion USD. It is expected to grow at a CAGR of 2.8 percent and reach a valuation of 8.6 trillion USD by 2026. The given valuation includes residential property, commercial property, agricultural land, and forestry.

According to experts, the global economic conditions and investment activity directly impacts the real estate asset class. Hence it is safe to say that, real estate valuation does and will continue to have a major role to play in the global economy.

Dependency on multiple siloed networks has been raising the questions related to transparency in the real estate industry. The transactions are lengthy and there is a lack of coordination between participants.

The reliance on many third-party intermediaries, makes the processing time consuming, expensive, and accessible only to a certain percentage of the population. For long the industry insiders have been trying to address these legacy issues, and with the advent of blockchain technology, that reformation has begun.

Real estate enterprises and professionals have come to value the disruptive force of blockchain and have been leveraging the same to streamline financing, transactions, and payment structures, optimize property sales and make real estate investments more accessible to the consumers.

Leading Companies Offering Blockchain Solutions in Real Estate:

Global blockchain companies are the chief architects behind the decentralized evolution of real estate, through their offering of advanced solutions to the industry insiders. A few notable names are:

HashCash is a leading blockchain development company that offers a plethora of services top their global network of clients and partner enterprises. Their blockchain solutions for real estate comprise of real estate tokenization platform, white label real estate exchange software, crypto real estate exchange along with a standard set of services including smart contracts, etc.

Deloitte offers blockchain services to commercial real estate firms and enterprises globally through their smart contract development services and other offerings in the financial front. Deloitte also provides audit, consulting, financial advisory, risk advisory, tax, and legal services.

Blockchain company Minddeft too has offerings specialized for the real estate industry. They are known to create smart contracts for clients and enterprises for easy leasing of the commercial property, along with tokenization services for the land registry.

Legacy Issues with the Real Estate Industry:

So, what are the issues with the real estate industry that these blockchain companies are fixing?

Inaccessibility
Access to real estate investments has for long been reserved for the financial stringer section of the society, due to the high pricing structure. There are a lot of factors that become hurdles in one’s attempt to own property. Financing requirements, credit score, etc. are common barriers that curb real investments for the natives. The same along with the requirement of international bank accounts and citizenship pose problems in international real estate investments.

Lack of Transparency
More than often the real estate industry has been dragged into money laundering scandals, tax evasion, and corruption, raising the question of lack of transparency within the industry. There is limited availability of information with no market database that creates more problems and act as a big discouragement for the investors.

Financing Issues
The entry to the real estate market is considerably high, which makes it inaccessible to all. Arranging funds and finances for real estate is a grueling task, that is yet again laced with heavy documentation and multiple compliances. Availing alternative financing methods ultimately turn the investment into a liability.

Lengthy Transactions
Real estate transactions tend to be slow and complex. It can take months to find the right property and then more to get it under one’s name after fulfilling all the monetary and legal formalities.

Low Liquidity
Real estate investments are often considered risky, due to their inherent low liquidity aspect. Under the present system, it becomes tough to liquidate a property for fast cash. The low liquidity is contributed by various factors such as a lesser number of investors, high estate fees, the involvement of third-party intermediaries, and time-consuming transactions.

Blockchain Solutions for Real Estate Industry

Blockchain through its inherent qualities addresses all the above issues and offers sustainable solutions and alternative to the same:

• Blockchain comes with censorship-resistant and verifiable options for information sharing, which addresses and solves the problems related to transparency and trust.
• The use of the shared and immutable database, instead of multiple siloed networks helps in the easy compilation of data, searching for documents and accessibility of the same to multiple stakeholders at a unified platform.
• Replacing traditional wire transfers with blockchain-based payment processors and peer-to-peer transactions reduces both time and cost of real estate transactions.
• The involvement of multiple third-party intermediaries like brokers, financiers, escrow firms, etc makes the process more complex. Implementation of blockchain eliminates the need for such entities by bringing the entire operation under a unified platform, following peer-to-peer technique.

The companies mentioned at the beginning of the write-up are all invested in delivering their clients within the real estate industry with sustainable and scalable solutions to create better investment opportunities within the sector. Some of the key features of a blockchain-based real estate system are:

• Peer-to-peer transactions reduce complexities related to real estate payments making it quick and seamless.
• An immutable shared ledger records all information related to property and mortgage. Being tamper-proof it becomes easy to detect ant fraudulent activity in such a fortified architecture
• Blockchain eliminates manual searching of real estate documents derived from multiple sources, by collaborating everything within a single distributed network.
• Real estate tokenization through blockchain enables the quick transfer of assets via peer-to-peer technique, enhancing investment options for the investors.
• Blockchain allows automatic document verification through a unified network which saves time and resources.

Blockchain solutions for real estate and companies offering the same are spearheading the technological evolution of property business which will improve investment opportunities for all who are interested globally. It also opens up new avenues for utility token investments through the tokenization of properties.