At present, different transactions in the industry of real estate are non-transparent and expensive as there is an existence of the middlemen such as brokers, inspectors, lawyers, notary public, escrow organizations, and much more. Now, no one wants to be dependent on them or paying them. The blockchain technology has a plethora of usages to remove the middlemen in various industries, because of its nature of decentralization. A future-proof blockchain real estate market will support the formation of new business models that link potential buyers and sellers.

Current difficulties with real estate Sector

Potential investors are facing challenges such as,

• High entrance criteria and standards comprising great industry experience
• Huge Real Estate Investment Trusts (REIT) are extremely competitive
• Residential investment and housing flipping need for lots of money and proficiency

Approaches headed for real estate investment

• There is 71 percent of Americans who are wishing real estate investment need to be easier, to begin with.
• 66% of Americans are considering that flipping houses are a good way to make money.
• If technology is offered to make investing in real estate easier, 48 percent of the American public will choose to invest in it.

Most of the persons agree that real estate investment as well as house flipping are profitable approaches to earn money but predict it as very difficult to get started with.

The distributed ledger technology is transforming the real estate market, whether you are purchasing entire houses or shares in groups of properties.

The blockchain is making real estate affordable to all

The blockchain, a digitized, distributed ledger technology that constantly stores and shares data that could empower the commercial real estate sector to come across different inadequacies and inaccuracies.

As per a survey of 800 executives and information & communications tech sector specialists from 2015 World Economic Forum, 57.9 percent of the respondents have faith that 10 percent of the global GDP information would be recorded on a decentralized system by the end of 2025.

Implementation facts:

• Property of Lake Tahoe was retailed for 2,739 Bitcoin or $1.6M in the year 2014.
• Bitcoin – realestate.com is utilizing Bitcoin, Ethereum as well as Litecoin to buy and sell.
• Real Estate of Manhattan has started the acceptance of Bitcoin in 2014.

Until now, the blockchain was recognized as the technology empowering Bitcoin. But now industry players understand the significance of blockchain based smart contracts which can perform a major role in the commercial real estate, possibly revolutionizing basic real estate functionalities like property transactions.

Process Acceleration (No Intermediaries)

There is an existence of middlemen as they keep information that you cannot access or don’t have approval that is necessary to operate in the current property transaction ecosystem. But when it comes to the blockchain, it can help you with a distributed database where everyone can store information, without any need for the permission.

The blockchain aid in secure authentication of the property records by reducing intermediaries. This distributed ledger technology for real estate will have a considerable influence on the financial authentication of the sales procedure. The blockchain’s decentralized database prove authenticity so an owner can legally transmit the ownership to the buyer without paying for third-party authentication.

Fraud Reduction

Attackers can fake the title ownership with the use of editing software to demand the transfer. Making a copy of the notary stamps has become very easy with the internet. However, this decentralized technology for the commercial real estate as proof of ownership/exchange/transaction and proof of existence is where its distributed nature is showing its power. Today, shifting the paper proof on digital proof is what almost every blockchain real estate startup organizations choose.

Ultimately, the blockchain will enable you to store your title documentation to its network, which other users of that network can record as well as verify if required. This aids to prove that you’re the owner of title documents, and the peer-to-peer network assists to avoid fraudulent activities.

Smart Contracts (Transparency)

It’s not at all easy for everyone to buy properties in today’s era. The process of mortgage and loans is quite tedious due to administrative hurdles. But by forming smart contracts based on the decentralized technology, the procedure could be smooth and easy going. With blockchain in real estate industry, you can create a digital ID for an asset as a buyer/seller. And by following this process so, the method of ownership transfer will be easy and much swifter than the older approach.

The smart contract can also assist in monitoring the progress for a transaction of real estate. From the time when these smart contracts are recorded forever on the Blockchain real estate, it cannot be reversible and changeable.

Liquidizing Assets

For plenty of investors, it is pretty challenging to create a diversified portfolio and liquidity in assets when they are under pressure. The blockchain technology can resolve this issue if all the investments are recorded through the distributed ledger that simplifies the shares exchange among investors.

Mr. Jon K. Haahr, a founder of Silver Portal Capital said that “The blockchain-enabled primary issuance and secondary trading platform for illiquid real estate securities and properties brings new viability to previously constrained aftermarkets by creating additional liquidity and ease of access for best-in-class real estate sponsors and issuers,”.

Crowd Ownership and Investing

Another stimulating approach in blockchain real estate is crowd ownership of property. With different models powered by the blockchain, a group of individuals can buy property and then apply voting to decide about what to do with the purchased property. Each participant can basically own a share of the property that they can sell at any time.

So, to summarize,

The real estate experts will keep going to get success in the era of a blockchain. The instruction, awareness and hand-holding of real estate experts will always be a significant part of a buyer/seller’s procedure. However, the management of money and transactions will predictably change, and that revolution is already ongoing. Brokerages will require to accommodate their business models to understand and empower smart transactions that will let to succeed in the age of the blockchain.