Real estate used to have a (largely earned) reputation for bypassing technological adoption in favour of its outdated manual systems. It's tough to pinpoint when that all started changing. Some practitioners believe the sea change started roughly a decade ago with the emergence of digital marketplaces, online listing services, social media marketing, etc. Others, meanwhile, maintain that real estate's tech renaissance began in earnest with the beginning of the pandemic when professionals and consumers were forced to adopt digital, contactless solutions.
However, it began, there's one thing for certain: real estate technology is accelerating at a breakneck pace, finally incorporating emerging innovations and unconventional digital tools.
One pivotal technology is blockchain. The transparent, immutable, secure and instant digital ledger is most closely associated with cryptocurrency, but the technology has exciting applications in how we buy and sell homes. In this article, let's detail how blockchain in real estate streamlines transactions.
Paperless, Instantaneous Contracts
"We plan to make the entire real estate journey for home buyers, sellers, and their agents as simple and easy as possible," Nobul CEO Regan McGee recently told Newswire."And we believe that blockchain is part of the solution."
McGee and Nobul are part of a growing chorus in proptech (short for "property technology") embracing blockchain for contract management. Because blockchain technology is secure and transparent, it is ideal for storing and managing contracts and transactions. These instantaneous records help remove some of the confusion from (what most real estate consumers consider) an excessively complex process.
Removing the Middlemen with Smart Contracts and Fast Asset Transfers
Blockchain has the potential to streamline real estate transactions by removing intermediary professionals like lawyers and notaries. Blockchain facilitates what are known as "smart contracts," which automatically kickstart once their predetermined conditions are met. Essentially, a smart contract is a self-executing agreement.
On the heels of smart contract innovation, "new platforms can eventually assume functions such as listings, payments, and legal documentation," Investopedia notes. This can help save consumers money on costly fees and commissions traditionally inherent to real estate transactions.
Increasing Liquidity Through Tokenization
Perhaps the buzziest application of blockchain in real estate is tokenization. Because smart contracts are automatic, investors can break down real estate transactions into "tokens" or fractions of a property - rather than buying the whole property. This allows consumers/investors to buy, sell and trade real estate as a liquid asset.
It also helps democratize real estate investing. Most people don't have the spare cash to buy another property; still, they can participate in the real estate market by purchasing tokens in real estate properties. Experts are optimistic that this radically new form of real estate investing will help inject fresh life into the markets.
Blockchain technology and real estate are a fairly recent pairing. It might be a few years before the nexus of blockchain and real estate becomes a mainstream feature of the industry. In the meantime, it's exciting to see how trailblazers and innovators are using the burgeoning technology to streamline the real estate transaction process.
