We are living in an era of change and these changes are more than ever before easy to spot in business. Almost overnight, entire industries can be replaced by newer, often cheaper, and more convenient ways to do business.
The real estate industry is on the verge of such a change itself. Blockchain has definitely left significant implications for the real estate industry.
As one of the main perks, we see the elimination of the need for middlemen in transactions and trust improvement among transactors.
Moreover, cryptocurrency in real estate can act as a record-keeper, push and speed up all contracts, leases, and transactions, improve liquidity, reduce fraud, and reduce costs and fees.
Let’s have a look at how this future symbiosis is going to work…
The Twenty-First-Century Business Practices
The concept behind cryptocurrency in real estate is meant to create a system that eliminates the middle-man figure from the flow of money.
As money changes hands from one person or company to another, cryptocurrency revolutionizes the real estate industry, making i:
- More convenient, and
- Infinitely more secure to transfer property ownership from one individual or business to another
The technology of cryptocurrency and blockchain entered the real estate world holding the promise of being exactly what our industry needs to move forward in the twenty-first century.
But before I explain how, let’s do a quick primer on how cryptocurrency works.
1. The Opportunity For A Marketplace Via Platforms
Blockchain introduces new ways to trade real estate. Trading platforms and online marketplaces today support real estate transactions, comprehensively and securely.
By getting real estate tokenized, assets can then be traded online, much like stocks and transactions.
2. No Intermediaries
Blockchain in real estate may soon usher in a shift of roles of brokers, lawyers, and banks. These new cryptocurrency CRE platforms can eventually assume functions such as:
- Legal documentation
Cutting out these intermediaries eventually results in buyers and sellers getting more out of their money. No commissions and fees for intermediaries, and the whole process becomes much quicker.
3. Liquidity While Cutting Costs
Real estate has long been considered an illiquid business, and cryptocurrencies and tokens can be readily traded for fiat currencies through exchanges. However, as tokens, real estate can be readily traded.
A seller doesn’t have to wait for a buyer who can afford the whole property in order to get some value out of their property.
Also, the transparency associated with cryptocurrencies can trim down costs associated with real estate transactions.
Beyond the savings made by cutting out intermediaries’ fees and commissions, cryptocurrency in real estate can cut other costs such as:
- Inspections costs
- Registration fees
- Loan fees
- Taxes associated with real estate
We all know that the global real estate market is worth hundreds of trillions of dollars, but is largely dominated by the wealthy and large corporations.
Through blockchain technology, it is possible for more people to access the market, and make more transparent, secure, and equitable transactions.
Blockchain believes in decentralized technology in order to make transactions secure. Information stored in the blockchain is accessible to everyone on the network, making data transparent and immutable.
5. Fractional Ownership
By endorsing fractional ownership, blockchain in real estate lowers the barriers to real estate investing.
Typically, CRE investments require significant money upfront to acquire property, or investors pool their money to acquire bigger ticket properties.
Now, on the blockchain, investors have to access a trading app to buy and sell even fractions of tokens for some asset.
And to conclude…
Blockchain technology has impacted the real estate industry in a variety of ways. It started its implementation by offering a plethora of new means for buyers and sellers to connect with one another.