Blockchain in Real Estate: How technology is Changing The Industry

[نور احمددد]

The world is moving fast like a train on the motion. All thanks to the dynamic breakthrough in science and technology. One of the changes happening in the global world is the use of blockchain technology, which is a peer-to-peer network that handles decentralized ledger of different transactions. This advent of this technology is partly due to cryptocurrency that is taking over the finance sector. So the use of cash as a medium of payment may become less effective in the coming years.

Generally, users of Blockchain can perform transactions with the use of central certification authority. The blockchain belongs to the chains of cryptographically encrypted blocks and contains specific information. The blocks verify every upstream transaction by itself.

Real estate and blockchain technology

This change has touched the aspect of the real estate industry and it has been projected that blockchain may soon take over the property value chain. This simply means that blockchain can be used as a purchase price for real estate transactions through cryptocurrencies. This is done through tokenization.

Similarly, blockchain may be used in the real estate industry via smart contracts, which are other known as electronic contracts. The contracts make use of computer protocols and automatically perform defined actions and monitor stored clauses.

How can Blockchain Change Real Estate?

Are you wondering about how blockchain will change real estate? It is quite straightforward. Blockchain technology allows the democratization of real estate properties. When this is done, gates would be opened for potential investors all over the globe to make a trial concerning real estate investment.

The use of blockchain will be beneficial to crypto-space because it can increase the real-life utility of tokens. If it works, the partnership between blockchain and real estate will yield good results.

Notably, blockchain is trying to remove barriers caused by previous traditional means of making payment. Through the use of smart contracts, real estate can now be tokenized and will be traded just like cryptocurrencies. This doesn’t only make the transactions easy, but it also ensures that they are secure and fast.

There are various things that you need to know about how blockchain technology is changing the real estate industry. Some of them are:

Use of platforms and marketplaces
Traditionally, real estate goes through listings and connecting buyers and sellers before any transaction can happen. With the aid of blockchain, a new method has been introduced.

This new method allows every trading platform and every online marketplace to assist and support real estate transactions comprehensively. ATLANT and other online media already have platforms through which blockchain technology can facilitate or speed up real estate and rental property transactions.

Typically, the assets will be traded just like stocks on exchanges and the online transaction will be done. Some of the media allow sellers of real estate properties to tokenize their assets the same way stock sale is done. Afterward, it will liquidate the assets via a token sale. Once this is completed, the collected tokens will be exchanged for fiat currency. The buyer automatically owns a percentage stake of the real estate property.

No need for intermediaries
Without a doubt, intermediaries are making lots of money from conventional real estate transactions and this is why prices of some properties always go up. The traditional real estate involves lawyers, banks, and brokers in its ecosystem.

With the introduction of blockchain, there may be a shift in some of these roles and participation. The new platform created by blockchain performs functions such as payments, listings, and legal documentation. As a result of this, intermediaries such as banks, brokers, and lawyers will be cut off from the transaction.

The seller and buyer will have more money because there is no more commission and every other fee charged by intermediaries. In addition to this, the transaction process will be faster because no intermediaries will delay it.

Increase in liquidity
People sometimes believe that real estate is not a reliable liquid asset. The reason is that it takes time before sellers and buyers can conclude sales. However, this bound to change as the barrier will be removed by cryptocurrencies and tokens.

The tokens will make real estate transactions easier and quicker. There is no need for a seller to wait for a prospective buyer who has the financial ability to buy the whole property. Interested buyers who understand the real value of the properties will contact the seller by themselves. Hence, the liquidity of real estate properties will increase significantly.

Fractional Ownership
Fractional ownership is another great way through which blockchain will change the real estate industry. Blockchain through fractional ownership lowers every barrier relating to real estate investment. In the traditional real estate, there is a need for upfront for any transaction to happen. Nevertheless, blockchain does not require this.

With the help of blockchain, any investor can easily access a trading app if he wants to buy or sell any fraction of the tokens. Therefore, fractional ownership assists them to manage the properties.

Unrivaled decentralization
Notably, when there is no transparency in an investment, there is a great possibility that it would crash any time soon. Fortunately, the blockchain system is built with decentralized exchange which enhances the trust investors have in the system. The decentralized technology makes it possible for peers, sellers, and buyers to verify information on the platform. The information stored on the blockchain is only accessible to every authorized peer on the network. As a result of this, every data is immutable and transparent. The essence of this is to build investors' confidence concerning the transaction. The rate of fraud is lesser on this platform; hence, many people will be willing to invest in real estate properties.

Reduction in costs
There are so many costs associated with traditional real estate. Apart from commissions and professional fees charged by intermediaries, there are other costs such as registration fees, inspection fees, real estate taxes, and loan fees. With the help of the transparency that exists on a decentralized network such as blockchain, all these costs will be reduced. If all these costs are reduced or removed on this platform, transactions will be easier and quicker to do in real estate.

In conclusion, real estate brokers in Egypt are using blockchain as a medium of transactions and we look forward to seeing how this will improve the real estate market in the area.