Blockchain in the present day is the new form of digital currency. Nobody would have imagined the extent to which Blockchain would have impacted the current situation. The success brought about by the cryptocurrencies shows that Blockchain has more advantages which are a significant disruption for the real estate industry. Below are some of the ways that Blockchain disrupts the real estate industry.
1. Ease of transactions
Various industries that have taken advantage of the Blockchain has benefited from the service in many ways including the real estate industry. Previously, when one purchased an office building, they were required to go through multiple steps to complete the transaction. First of all, the insurer, lawyers, inspectors and regulators of the property needs to be involved in the whole process and are required to keep separate records of the transaction. The entire process of purchasing, verifying and recording the building can be expensive for the buyer and needs a lot of time to complete. When government entities are involved, it can even take longer than expected to have all the records verified and recorded. The primary reason why when government entities are concerned the process tends to take longer is that they are a high demand for the services from the people needing similar services. However, with the use of Blockchain services, the facilities are fast since the buyer, and the seller of the property get access to an immutable digital ledger showing all the parts of the transaction. Although Blockchain does not have the restrictions of sales and other vital decisions of the concerned legislators, it serves as a powerful tool for the verification process.
2. Minimal risk of fraud
Traditional transactions required that the buyers and sellers would have to use escrow and title companies as a guarantee that both parties would keep their word until the end of the transaction to reduce the risk of fraud from any party. However, with the use of Blockchain technology, escrow and title companies may not be required. In the past, there have been many cases of fraud in the real estate industry more than any other. Fraudsters made the sector a scammers’ nesting ground because of the many processes involved in the transactions, and it was easy to trick the parties. Parties prefer to have the third-party verification to protect themselves from the scams, but the processes are expensive. Blockchain, on the other hand, is cheaper since the parties do not have to cater for the costs of the third party since it vouches for the identities of the involved parties from the distributed database. All the transactions involved are recorded in the Blockchain and are protected with cryptography hence challenging to hack minimising the risk of fraud.
3. Smooth rental transactions
Many companies are now preferring to give decentralised platforms to their clients through the Blockchain startups in 2018 so that they can offer stable and fast rental transactions. Both landlords and tenants can quickly deal with the rental tasks at a similar place without much struggle. There are smart contracts that have replaced the traditional paper agreement between the two parties. There is also a tokenised utility that is, and all the record of transactions are recorded in the Blockchain database which immunised to any changes. Blockchain technology also provides auction services as well as a method that helps the landlords to screen their tenants. Rental transaction services also come with a security deposit that is funded through crowdsourcing that is beneficial in saving money for the user.
4. Replaces the middlemen
In many occasions in the real estate industry, the middlemen always have ways of charging clients more fees than required for the property. Peer-to-peer agreements, executions, and negotiations between the parties are empowered in the Blockchain technology; hence the transactions become less costly.