How Blockchain is Revolutionising The Real Estate Sector
Blockchain technology was invented a decade ago, in 2008, by a person or group of people with an unknown identity. It is making its presence felt across the globe in all the fields, of which real estate is one.
Blockchain is an extending list of records, and each record is referred to as a block. Blockchain technology helps the users to store the information related to a series of transactions in blocks. The data is stowed in a network of computers called nodes.
In simpler terms, blockchain technology creates a digital track record of the data shared transparently and is rapidly updatable. Parallelly, information can be accessed by all the users of the chain. It is challenging to hack the information once it is stored in the blocks.
The transformation that can be brought about in the real estate industry using blockchain technology drives the nations across the globe towards it.
Blockchain In Real Estate Sector
Digitization of Land Increases the Credibility
The land is the most disputable asset owing to the counterfeiting of the documents and defaulting. The root cause is a lack of transparency and a foolproof registration process.
Blockchain technology, with its clear procedures, reduces the risk of disputes. When you register for a property using blockchain technology, it verifies your identity and the property’s genuinity before approval. It provides you with a hash number that stands unique to every property.
Any attempt to forgery would stand void as the property registration would be terminated. Thereby, digitization increases the credibility of the asset.
The same set of rules and procedures of blockchain technology also improves the maintenance of the records. But, looking at the size of the land records that have to be digitized, it takes substantial time. It also requires all the stakeholders to come together at once.
Fractional Ownership Properties
RealX is a company that claimed a couple of years ago that its first property was bought by the customers under fractional ownership using blockchain technology.
It is also referred to as tokenization in the blockchain, where the property is split into tokens, and fractional ownership is offered to the buyers. It has paved the way for the participation of average investors.
If you invest in properties with fractional ownership properties, you can become the owner with small ticket sizes. You may also enjoy the property with no responsibilities on your shoulder. The properties are maintained and leased by the managers. It is for you if you want to invest, sit, and relax, enjoying the returns. Also, Blockchain technology assures the best quality deals with no litigation.
Creating Smart Identities and Stowing in the Universal Database
In this, a unique code would be given to each user, and the code would be stowed in the universal database. The universal database stores the information, and you can access the information that is shared globally.
Register yourself with the blockchain technology that provides a smart identity. You can access the information of the investor you want to associate with and check his credit history. You can also track his record of handing over the properties.
Recently, Thane is working on blockchain technology in property tax documents, which helps the users get the loan documents verified with QR scan, needless to visit the office.
As a user, blockchain would be a one-stop market for the buyers who get the deal done faster. Blockchain technology provides you with anti-fraud instant document verification that increases the authenticity of the deals. You are entitled to genuine deals only.
Due diligence is no More Diligent
Due diligence is the complete survey of the property before buying it that provides all the property information. It assures the buyer that the property is risk-free and litigation free. It is very tedious to conduct due diligence independently. Online platforms that offer real estate investing services like Assetmonk present you with properties that have undergone thorough due diligence paving the way for hassle-free investment.
Due diligence through blockchain comes as a consequence of the smart identities and universal database. Once the universal database is set, you can start accessing the required information. Due diligence can be facilitated using the same platform using the digital signatures as and when required.
To register your property, you need to upload the documents, and a hash number is provided subsequently. The hash number can be accessed after that, and that stands distinct to every document. It means if you have a document with a hash number, any other with the same hash number cannot exist. This lets you identify the fraudulent documents.
The peer can do the final step of financial verification to a transparent peer transaction, concluding the purchase process. Blockchain lets you make transactions with increased safety.
Smart Contracts – Smarter Way of Making Transactions
Smart contracts using blockchain technology is a simple process where you, as a registered user, can make transactions with another registered user. After both parties sign the digital agreement, the money is transferred. This information is added to the blocks.
It might take a day or two to make transactions through financial institutions, but blockchain technology significantly reduces time, bringing it down to 10 minutes. It assures the secured transaction within no time.
Advantages Of Blockchain Technology
Here are some of the advantages that blockchain technology offers in the field of real estate.
Increases the transparency
Blockchain technology is a distributed ledger, which holds your complete transaction information. This cannot alter your information quickly as it needs the consensus of everyone to alter it. The information of everyone is shared with everyone. It lets you make transparent deals reducing the risk of counterfeiting.
Decentralization enhances security
Since the information can be shared and accessed by all the users, blockchain technology eliminates the need for a central authority. Decentralization and storage at multiple points enhance security. If any of the system or storage point undergoes malicious attacks, your data remains safe as it is shared with all the users.
You may leave behind the worry of papers and documents as the information stored in blocks forever.
When you invest through blockchain technology, the approval, and the due diligence process consume too little time than the traditional procedures. The properties listed are curated and checked well before presenting to the end-users.
You do not need as many middle-men as in conventional methods of investing in real estate. Neither do you have to go around looking for the properties to choose from, as blockchain presents you with a plethora of assets registered with it at one go.
You get your deals closed in a moment once you make a decision. The monetary transactions through traditional financial institutions like banks take time while it is nearly instant, with the blockchain increasing the industry’s efficiency at large.
Blockchain has brought revolution across the globe. With its dominance in every industry, it is creating a supreme experience of safer and secure transactions. Blockchain is as well a nascent technology in developing countries like India. With its scope never-ending, blockchain goes farther and beyond.