All of sudden, everyone has started to talk about Blockchain. Yet, it isn’t a new technology that has just hit the market. In fact, the first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. The same person (or group of people) implemented it as the core technology for the cryptocurrency, Bitcoin. Blockchain, for Bitcoin, acts as a public ledger for all transactions on the network.
So, what does a public ledger actually mean? Let me clear you this by a simple example. Imagine Peter and David are two best friends and, both are standing on the stage of an auditorium. There are also 1,000 people as audience in the same auditorium. In front of the audience, Peter hands his Rolex to David and declares that he now owns my Rolex. The audience of 1,000 people also declares that David now owns the Rolex provided by Peter. This is a publically declared transaction. Now if anyone from 1,000 expresses concern / conflict over the authenticity of the transaction, the other 999 people will refute it. This is the essence of how the technology of blockchain works.
But, this article doesn’t talk on the invention of the blockchain or Bitcoin.
But this article isn’t aimed at talking about on the invention of the blockchain or Bitcoin. It does not also aim to discuss how the technology of blockchain can keep the records of transactions. It discusses how the technology of blockchain can be utilized in other industries, such as Real Estate, instead.
Blockchain can change the way real estate companies and agents do their business. The technology can help in developing smart contracts that can facilitate real estate contracts, escrows, and property records to be completed as well as monies distributed without title companies or attorneys. These contracts are similar to vending machines in which a user deposits money and, then the money spits out a product. There is no human intervention. It’s a fair play, isn’t it?
The technology of blockchain also makes it possible for home buyer to buy a home and complete the sale as well as escrow and title insurance just by clicking on shopping cart on a website. The technology can be prepared to ensure that the buyer of a home gets the title /deed and seller gets its money (via a cryptocurrency).
Real estate companies and agents certainly thrive in the era of the blockchain. However, advices and knowledge provided by real estate agents during the transfer of ownership would always be important as the part of buying or selling process, but the blockchain can change the handling of money and tractions
Here are the key opportunities that the technology of Blockchain
- It Improves property search process: Inefficient property search has been the key issue for both buyers and sellers of properties. It’s affected by the accuracy and details which may be dependent on the preference of the brokers. There is the lack of standardization, and, substantive human intervention. With the implementation of blockchain based solutions, the data can be freed from the issues related to inaccuracy, obsoleteness, fragmentation, and incompleteness.
- IT eliminates paper-driven, offline due diligence. The pre-lease due diligence is a time consuming process. It has predominantly been a paper-driven, offline process so far. The blockchain technology can change it all. It can drive efficiency and accuracy in the due diligence process as well as speed it up. The technology can be created to develop such digital identities of a property, which can easily be transferred from one owner to another, without any need of physical identity proofs.
- The Blockchain also eases leasing and subsequent property and flow management of case. Presently, buyers and sellers, both experience difficulties in managing the ongoing lease agreements and several property related operations. Blockchain based IT solutions can enable smart contracts easier, transparent, and efficient.
- It helps in making smarter decisions. The absence of the sufficient real-time data impacts in making right decisions at the right time. The blockchain can work as a connective tissue among several varied technology systems refining the quality of data, analysis, and decisions.