Real estate trading is undoubtedly stressful. It’s getting even more nerve-consuming because real estate trading usually contains a set of vague and fragmented operations, tiresome paperwork, as well as surprise tasks and money expenses.
Utilizing Blockchain in real estate is a perfect solution to the troubles above. Blockchain real estate startups that had already begun to utilize the tech benefits started to appear more than 3 years ago. So mass acceptance of this technology is just a matter of time. And if you desire to be among these innovators, obtain tremendous profits form this brilliant business idea plus feel yourself as cool as Google or Amazon, you’d better consider software development of your blockchain real estate app!
If you are still hesitating on what will be the true impact of blockchain on the real estate industry for the next few years, it’s better to look at some statistics.
In 2022, companies from various industries spent about $6.6 billion to implement blockchain technology in their processes. It is almost 50% more than in 2020. The global spending on this innovation will grow by an average of 48% annually over the forecast period from 2020 to 2024. It indicates the rapid pace of blockchain technology adoption globally.
What Main Problems Blockchain Application Solves in Real Estate
The commercial real estate industry has experienced a drop in growth over the last few years. It faced some problems that remain objections to this market expansion.
At the same time, blockchain development helps create solutions to resolve these issues. So, let’s reveal what the critical real estate industry problems are and how blockchain applications can help to overcome them:
Lack of Transparency and Slow Operations
One of real estate’s biggest problems is the total lack of transparency between the contractors, which causes corruption, fraud, and money laundering and prevents industry growth.
Yet, one of the main benefits of blockchain in real estate is shared secure databases.
Leasing, purchasing, and sale transaction records become common knowledge, so realtors don’t end up stepping on each other’s toes. Multiple listing services, which collate property-level information from the private databases of brokers and agents, are a prime example of why this new tech is so critical.
Many independent parties can also use the blockchain-enabled database, but only those that should legitimately have access to it. Hence, only contractors involved with real estate management, such as the owners, tenants, lenders, investors, operators, and other service providers, can always have stable and fast access and abilities to modify or add needed information.
With blockchain, real estate participants can access and share the same blockchain tech. They don’t need to have the data integrity fears they once did.
Therefore, blockchain allows building a platform for all parties for secure, transparent, and faster communication, automation, tokenization, and access to real-time information, all of which are highly valued in real estate.
Unsecure Titles or Data Management
Another real estate problem is improper record-keeping, which is critical for fast business processes.
With blockchain, all entities get digital identities that cannot be mistaken or appropriated. It leads to more transparent record-keeping with property titles, liens, or financing. Now, this technology allows making title companies to be disintermediated through blockchain.
Slow and Unsafe Transactions
Many real estate transactions come with conditional clauses, need a long-time to proceed, and must be transferred safely. Thus, the transaction can be more efficiently executed through blockchain.
For example, a purchase-sale transaction could depend on title clearances or loan approvals. With blockchain, real estate entities can check whether those transactions have been enacted and conditions have been met.
Another problem with real estate is that it needs to be more secure and protected against malware. Blockchain solves that by providing a higher security standard of data encryption.
So, blockchain in commercial real estate businesses can ensure safety and high speed of transactions
State of Current Real Estate Transactions
People often apply to real estate services online: according to the NAR material, 97% of homebuyers use the Internet to make their choices without leaving their current accommodation. On the one hand, such accessibility opens new perspectives for realtors and their clients, but on the other — it makes real estate vulnerable.
Let’s look at the most common dangers and problems the real estate domain faces these days.
- Price rising turns real estate opportunities into a distant dream for most people. For example, the average house price in the UK was about 296 thousand pounds in August 2022, which is more than the last year’s cost, as to the ONS report.
- Mortgage lenders can perform fraudulent operations with the help of smart contracts: thus, 1 of 120 mortgage applications included fraud, mentions CoreLogic.
- Improper management of building materials leads to shortages of these materials and delays in the building process as a consequence. According to NAHB report, more than 85% of builders told their managers about these problems.
- Homebuyers are getting younger, as the RealTrends research says. These categories of real estate customers popularize crypto mortgages that don’t need credit checks. Such a circumstance is advantageous for individuals with bad credit history, or those who don’t want to pay a tax.
What is the way to overcome the defined issues? Ragnar Lifthrasir, Founder & Chairman of the International Blockchain RE Association, thinks it’s Blockchain technology real estate can rely on and mentions the following about it:
There are many ways we could use Blockchain technology in the real estate: purchasing real estate, escrowing real estate, recording the transfer of ownership onto the Blockchain
LightClix Experience in using Blockchain for Real Estate
LightClix has considerable experience in blockchain and Real Estate. Our software is also enhanced by IoT, AI, AR, and VR. All these innovations combined with blockchain can make your product a market leader. Do not hesitate to contact us and turn your fantasy into reality!
Blockchain in real estate will become more and more necessary every year. Our advice to you is to implement it today. We can help you create a blockchain-based real estate solution here.