There have been a lot of discussions about blockchain applications in cross-border transactions, the legal, healthcare or humanitarian sector. However, little attention has been given to the potential uses of blockchain in real estate. Buying or selling a property involves a lot of costs and inefficiencies owing to the involvement of numerous third parties. Blockchain can disrupt real estate by speeding up the process, reducing fraud, providing more transparency and, ultimately, by offering safer investments to everyone.
Faster Real Estate Transactions
Buying or selling a property can be a cumbersome, opaque and expensive process due to the involvement of multiple stakeholders: brokers, government property databases, insurance and property databases, escrow companies, inspectors and appraisers, and notary publics. Paying and depending on all these parties make real estate transactions very costly, inefficient and slow. However, buyers and sellers want to finalise the deal and sign the contract as quick as possible. Blockchain can remove these intermediaries. All the necessary data for the real estate transaction could be stored in the blockchain database and be easily accessible for the buyer or seller.
Escrow and third party verifications have been traditionally used by buyers and sellers to mitigate the real estate fraud. However, many buyers or sellers wish to make a quick real estate transaction and refrain from security measures and verifications. When security measures are not followed, buyers are subjected to fraud. Advances in computer technology make it easy to forge documents and advertise fake properties. Each year, millions of dollars are lost in the real estate market. Blockchain can eliminate real estate fraud by offering an incorruptible database where digital ownership certificates for properties will be saved.
Almost all real estate transactions face information asymmetry problem. Sellers are usually better informed about the property value than buyers. Consequently, the individual economic decision might be worse than in a scenario where all parties have symmetric information. Blockchain can confront this issue by making important data on prices of comparable properties available to everyone. Also, the entire transaction history of the property could be documented on the blockchain database.
Blockchain can offer real estate market cost and time savings, efficiency, fraud reduction and transparent transactions. Take as an example this blockchain solution for Buying and Selling House we developed together with Nets.
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To learn more about blockchain payments visit Coinify Website.