How Blockchain Technology is Revolutionizing The Real Estate Sector?
Most people know blockchain only as of the technology behind NFT marketplace, cryptocurrencies, digital wallet and more. Given its widespread usage in FinTech software and financial services, it’s hard for a novice to understand their differences. With advancements in blockchain, the real estate sector has become a slow adopter of the new technology.
Real estate involves complicated procedures and, thus, the most conservative sector to adapt to new technology. With blockchain technology, the real estate sector moves towards a better, transparent, and secure ecosystem that stores data in a distributed network.
Blockchain development companies like RisingMax are leveraging their expertise and building robust, secure, and reliable business solutions. Real estate businesses worldwide are partnering with blockchain development companies to develop new ways of buying, selling, searching, and managing real estate properties. The technology is rapidly evolving itself, fixing issues with the traditional real estate systems and transforming the industry.
Blockchain technology has been making its presence known in the Indian real estate industry in the recent past. The Indian real estate sector involves complicated procedures such as several transactions, multiple parties, and detailed due diligence. India needs a better efficiency, accuracy, and transparency system for running such processes. This is where blockchain can help.
This post will discuss this unique amalgamation between blockchain technology and the real estate sector. How this technology is becoming a perfect technology in bringing the digital revolution to the real estate industry.
But before diving deep into the topic. Let us start from the basics and understand major issues in the traditional real estate industry.
Five Major Issues With The Traditional Real Estate System
- Less Transparent
Real estate is one of the most conservative and transparent sectors. Various factors such as citizenship, credit score, payment method, cash requirements, etc, can hinder a user’s involvement in this sector. The lack of any database that plays a major role in buying and selling a property is one of the major issues with the traditional real estate system. This, as a whole, makes the entire system complicated and less transparent for all.
- Laborious Paperwork
When it comes to buying and selling a property in the traditional real estate system. A laborious and time-consuming documentation process follows it. Due to this reason, there are many instances where real estate companies lose their potential customers and some great revenue-generating opportunities.
- Property Related Frauds
In real estate, most deals are on paper and based on human trust, thus, there is always a high possibility of property-related fraud. In addition, this lack of property-related databases makes it difficult for anyone to easily access the information related to any property. The lack of a database increases their dependency on the intermediary, putting them at a higher risk of fraud.
Even though investment in the real estate sector is often termed as highly rewarding. There is no denying the fact that the involvement of intermediaries and fees such as broker fees, registration fees, taxes, etc results in increasing the overall project cost. For this very reason, the role of blockchain in real estate transactions is increasing day by day. The addition of intermediaries within the traditional blockchain project makes it an expensive investment.
- Lack of Trust
In the traditional blockchain system, whenever there is a buying or selling of property, the entire system is based on human-human trust. Two parties that are interested in buying and selling real estate involve a third party to add trust within the system. However, this lack of trust within the real estate industry can be addressed with the addition of blockchain technology. The addition of blockchain and real estate transactions helps build trust in the system.
But before diving deep into the topic. Let’s learn about the basics of blockchain technology.
What Is Blockchain Technology?
Blockchain technology is a data storage method where information is stored on a digital ledger in a decentralized way. It is impossible for anyone to change, hack or alter the information stored within the blockchain system.
The real estate sector can benefit from blockchain technology in many ways. This technology can make it easy to transfer titles and price negotiations simply and securely. Blockchain technology simplifies and digitalizes the entire real estate sector and enhances the property purchasing experience of any individual without the involvement of an intermediary. This is why businesses use blockchain in real estate transactions and make the entire system secure.
What Blockchain Technology Bring To The Table For The Real Estate Sector?
Transparency and Security
In blockchain technology, the information or data is stored in a decentralized server that is accessible to everyone. This means that everyone within the system has an exact copy of the data, making it difficult to alter, delete, or modify stored information. In addition to this, the data can be easily accessed by both buyers and sellers in real time. Anyone within the system can access the information whenever they want, thus reducing the chances of any fraud or mistake. The addition of blockchain technology brings more transparency and security to the system.
Platforms and Marketplaces
In the traditional real estate system, buyers and sellers connect privately to trade their privately owned property. With the addition of blockchain technology, there are various real estate platforms and marketplaces where users can buy and sell properties. Sellers can use blockchain technology to tokenize their real estate properties and reach thousands of real estate buyers on the platform. If you plan to launch a real estate marketplace platform where buyers and sellers can trade these assets with blockchain security. Then, you can leverage the expertise of our blockchain developers at RisingMax to build a top-notch real estate marketplace for you.
In the traditional real estate system, the intermediaries are added to real estate deals to build the trust of both parties involved. The addition of intermediaries adds up fees such as broker fees, consultation fees, taxes, etc. However, the blockchain cuts the intermediaries between the buyers and sellers, which cuts down the overall commission. With the removal of intermediaries, property buying and selling becomes quicker and easier for anyone. Without intermediaries, businesses now make more sense to opt for blockchain in real estate transactions.
Earlier, buying and selling real estate were seen as a time-consuming process as the transfer of money takes time. Due to this reason, real estate was often termed an illiquid asset. But with the tokenization of real estate properties, it’s now relatively easy to sell these assets and liquidate them via fiat currencies through exchanges. Thus, making the entire process more efficient and swift, as a seller won’t have to wait for a buyer to arrange money.
With blockchain technology, it’s now easy for a buyer to invest in a property and buy a fraction of a property. This lowers the barriers for an investor and is likely to attract more investors. You can hire our blockchain development team to build a platform where investors can use a trading app to buy and sell a fraction of property with digital tokens. Depending upon the terms of the agreement, a buyer will continue to enjoy the ownership of the property.
Everyone knows that the blockchain is a decentralized technology. The information is stored in a decentralized way bringing more trust and transparency to the system. The information stored is accessible to all within the network, thus reducing the fraud attempts and making data transparent and immutable. On top of it, the addition of blockchain-based smart contracts builds more trust in the system as these are enforced automatically when both parties satisfy the agreement terms. With the availability of all data related to property, it is now relatively easy for a buyer to make a well-informed decision.
Let’s look at the role of blockchain technology in streamlining the Real Estate Processes.
The role of blockchain technology in real estate is more than defining land ownership. You can track the entire system with blockchain technology, from property ownership tracking to client interaction to reporting. Entire processes within the real estate can be streamlined with this technology.
Here’s how blockchain technology can be used for efficiently managing asset management.
- Client Onboarding
Knowing your customer, also known as KYC, is an important client onboarding process that is often time-consuming. However, with the introduction of blockchain within the system, you can reduce the client onboarding time and make the entire process more transparent to everyone in the network. As a client’s onboarding is reduced, real estate businesses can focus on providing smooth and swift services.
- Faster Settlement
During the buying and selling of real estate, sellers have to wait for a long time for settlement. With the introduction of blockchain-based smart contracts, both seller and buyer are assured of faster settlements. Smart contracts follow a self-execution process, and once both the parties satisfy the set terms and conditions. This ensures all parties involved an unbiased and faster settlement of the contract.
- Regulatory Compliance
With the introduction of blockchain-based smart contracts, users won’t have to worry about industry regulatory standards, international laws, location, etc. There is no doubt about the credibility of these contracts, as these are updated regularly to meet specific industry standards. As these smart contracts comply with the specific industry’s regulations, both buyers and sellers are assured of legal and regulatory compliance.
Blockchain technology is still in its nascent stages, and its introduction to the real estate sector opens up endless possibilities for the future. Hiring blockchain development experts like RisingMax enables you to leverage this new-age technology and offer top-notch tech software solutions to your customers. This new-age technology plays a vital role in revolutionizing the sector by eliminating unnecessary paperwork, audits, and intermediaries within the system.
Blockchain is bringing radical changes, and these are happening at a rapid pace. Real estate businesses worldwide are swiftly adapting to these changes and making themselves more accessible to buyers and sellers. With its introduction to real estate, the services related to these are becoming more affordable, transparent, and secure than ever before. Thus, opening new and better opportunities for budding entrepreneurs who are looking to take advantage of this highly profitable sector.
If you, too, are planning to leverage blockchain technology and launch a real estate business software solution. Then, you are in luck.
RisingMax, a top-notch blockchain development company, provides a FREE consultation call with its experts. Don’t miss out on this limited-time opportunity.
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