Can the Blockchain solve traditional real estate problems?

Blockchain technology can have a wide ranging impact on the real estate industry. This includes providing new ways for buyers and sellers to connect, as well as solving a range of traditional real estate problems. That brings us to today’s topic: Real Estate problems and how the Blockchain provides a solution to each one. For example, lack of transparency, corruption, money laundering and tax evasion. In blockchain applications, these problems can be prevented because everything is on the blockchain to see, verify and trace its origins. Another factor is intermediary fees versus blockchain low-cost fees.

If a person purchases a property for investment, or personal use, a lot of fees will be incurred along the way: transfer fees, lawyer fees, inspection fees to name a few. In comparison, blockchain technology can reduce the responsibilities due to smart contracts, reducing the fees typically required to buy real estate.

Another factor is the lack of liquidity versus blockchain’s liquidity. Today if a person wants to sell property then the seller must go through the lengthy process of finding buyers, negotiating price, processing the documents and the mortgage and more, before the purchase can be finalized and paid. Properties can be easily traded as tokens. And trading platforms will eventually allow sellers to tokenize their assets, allowing them to treat them as stocks and sell them through token sales on a platform. Because the seller does not need to wait for şnterested buyers to prove that they can afford the tokens or they don’t have to wait for them to go through the entire orıces, the entire transaction is shortened. The tokens can then be collected and exchanged for a fee, with the buyers owning a percentage of the property.

Other problems with traditional real estate: barriers to entry. As we have talked about before,

In reality, real estate isn’t available to everyone. Participating in the real estate market depends on a variety of factors like your net worth, accreditation and other factors. For normal folk, they can buy residential, commercial and industrial properties but perhaps not downtown buildings that are 30 storeys high, or special real estate like the Eiffel tower. Now that could change in the future: fractional ownership and real estate tokenization. To buy income property today, you need a pretty big down payment. We now have the ability to tokenize real estate, which will allow buyers to obtain fractional ownership. This is going to lower the barriers to real estate investing, making it accessible to anyone willing to invest in a property. Tokenzing real estate means turning a real estate asset into a set number of tokens. For example, if a property is 100,000 dollars, there could be 10 tokens worth 10 thousand dollars each, or 2 tokens worth 50K dollars each. Through blockchain, interested investors may in the near future only need to access trading platforms such as Binance, to buy and sell these real estate tokens.

Efficiency using blockchain technology and fraud prevention: Blockchain Technology and msar contracts can also be used to automate recurring payments for rental property on a monthly basis. The transparency and security features on the blockchain will also prevent fraud. Since smart contracts could automate a lot of the process of buying and selling a home, these could reduce the responsibilities of lawyers and even realtors.

As we’ve demonstrated, blockchain technology can indeed solve many of the problems faced by traditional real estate. Watch this space!