Decentralized architecture, verified transactions, and an immutable application- These are some attributes that come with blockchain integration with your business.
Every now and then, any business, no matter what industry it belongs to, grows. This growth is usually promoted by changing and forever-growing business environments and industry innovations. A significant part of this growth today is technology. And the biggest revolution that technology is bringing in recent times is blockchain.
It has become obligatory for businesses and organizations to be open to radical changes in order to have a sustainable strategy of doing business and stay relevant indefinitely. Blockchain is one such revolution that will bridge businesses and the future. Let’s see how the real estate industry will benefit from this novel technology.
Did you know, the United States constitution initially restricted voting rights only to the owners of real estate. Luckily that has been amended for good but the importance of real estate stays the rock bed of the value of the industry. The real estate industry primarily comprises of four types: Residential, commercial, industrial, and land. The construction of new buildings, new home building, real estate seller and buyer agents, are elements that make up the real estate industry.
The valuation if real estate is dynamic in nature and depends on a variety of factors controlled by the economy, the geography, and everything in between. Often times, real estate evolution has also seen to have effects on the economy and the GDP of a nation. New technology, maneuverability, organizing differently, and management are some driving forces that make up the disruptive real estate industry.
Where will we see changes through real estate blockchain development?
Broadly, there are two fundamental modifications that the real estate industry will undergo:
- The use of blockchain technology for real estate, and
- The social impact that will come through blockchain development for real estate.
Looking at intricacies of the market, areas like asset management and real estate funds, project financing, loan and mortgage securitization, property management, land and property registries, sales, and reassignment, urban planning strategies, construction and property development, investor and tenant identity, payments and leasing, etc are some aspects that will undergo updation because of blockchain integration.
New patterns will emerge and traditional methods will soon become ob, flawed methods will be obsolete.
How does blockchain add value real estate industry?
Automation will be the biggest development that will come through real estate blockchain development. Instead of just updating how intermediaries function, this technology will just deplete the need for most.
All parties involved will be functioning and digitizing each and every step of their involvement in the real estate project, making it transparent for all parties involved and having the detailed immutable.
Since the transaction is not just digital but stores in decentralized nodes, there is negligible to nullified possibility of a soiled database, rendering the whole process completely trustworthy, with most actions both automated and digitized instantly.
Entire businesses benefit from something that blockchain can basically automate and record without any possibility of unrequited amendment. This will reduce costs along with the time saved.
Efficient transaction processes
Traditionally, or at present, transactions are conducted in a way that it requires various costly verifications that not only add unnecessary layers and intermediaries, but also lengthens the timeframe in which it gets completed. Blockchain will streamline the transactions making them more efficient.
Ryan Serhant, bestselling author of “Sell It Like Serhant” and star of Bravo’s Million Dollar Listing New York, in conversation with Forbes stated, “The market in New York is always strong, but it can take some time to sell for the right price in a new construction building. With blockchain tokenization, we can remove the unruly pressure of traditional bank financing, which is much healthier for the project and all of the stakeholders. Tokenization is paving the way for a new forefront in real estate development.”
This is just one potential use case in one of the hottest real estate markets on the planet. Just like major industries that will undergo updation in their traditional methods, even after digitalization after the advent of the internet.
The most visible change that the consumer, or the individual outside of the industry will experience is the need to maintain that portfolio folder that one needs to summon every time they decide to make an investment or sale of real estate ownership. This will be very apparent on a personal level as digitization and automation will make sure the real estate property will practically take care of itself.
The cadastre, the way we look at property ownership and registration will not be the same. Blockchain will make the whole process efficient for all the parties involved. There are chances that the whole system may become globally homogenous, making it easier to make investments without geographical boundaries being as big a hurdle. Adjustments will be forever etched and visible in a blockchain based record, making it easiest to track the peaks and troughs of the real estate market and its development.
Another corollary industry that will benefit from this integration is the banking industry. Since a real estate purchase/sale is unimaginable without the involvement of the bank, which in itself will undoubtedly undergo changes due to blockchain will be able to trust and finance parties easily given the ability to monitor aspects like cash flow. Other industries that might just need a mention are insurance and taxation agencies that will benefit when we consider their involvement in the processes of real estate solutions.
Shedroff, Nathan. “Self-managing real estate.” Computer 1 (2018): 104-104.https://www.computer.org/csdl/mags/co/2018/01/mco2018010104.pdf
Veuger, Jan. “Attention to disruption and blockchain creates a viable real estate economy.” Journal of US-China Public Administration 14, no. 5 (2017): 263-285.https://www.researchgate.net/profile/Jan_Veuger/publication/322392878_Attention_to_Disruption_and_Blockchain_Creates_a_Viable_Real_Estate_Economy/links/5b7c2e61299bf1d5a719de02/Attention-to-Disruption-and-Blockchain-Creates-a-Viable-Real-Estate-Economy.pdf
Karamitsos, Ioannis, Maria Papadaki, and Nedaa Baker Al Barghuthi. “Design of the blockchain smart contract: A use case for real estate.” Journal of Information Security 9, no. 3 (2018): 177-190.https://www.scirp.org/journal/paperinformation.aspx?paperid=85741
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