In a recent survey conducted by BrickVest, a European real estate investment platform, a promising 56 percent of participants expected to see the industry adopting blockchain technology for real estate transactions. The potential cost reductions and efficiency gains blockchain technology could have in the real estate market may revolutionize the time taken and the manner in which real estate transactions are typically conducted.
Despite this, only 31 percent believe this to become the norm, as trustees and notaries are so commonplace when exchanging real estate. Adding on top of this, only 44 percent claim to be familiar with blockchain, and only 2 percent are “very familiar” with the concept.
As stated above, one of the biggest implications for blockchain use in this sector will be the ability to massively speed up the buying or selling process of a property through the use of smart contracts. It could reach the point where so much of the process is automated that buying or selling a property would be as easy as exchanging stock on the stock market.
The overall cost of exchanging a property could also be reduced by removing the need for third parties such as the trustees and notaries that are traditionally used to ensure the process is conducted without a glitch. Real estate agents typically take 6 percent in fees as well, split in half between the buying and selling broker.
On average, a new American home sells for $360,000 according to the United States Census, that 6 percent equates to nearly $22,000. This makes for a very enticing real world situation in regards to introducing newcomers to cryptocurrency; most people are willing to listen when they can save several grand.
Coupled with the transparency characteristics that blockchain technology provides to thwart fraudulent behavior, use of blockchain technology in the real estate industry could prove to be a widely successful real world application.
Initiatives utilizing blockchain technology in this market have already sprung up, with numerous projects vying to hold the lion’s share. Blandlord among others is an example of the lower barriers to real estate investing blockchain could introduce. The platform allows users to buy shares of a house, receiving proportional profit to rental income, as well as enabling users to list homes quickly.
The International Blockchain Real Estate Association, IBREA, is an organization with a focus on implementing Bitcoin and related blockchain technology into real estate and Ubiquity touts itself as a “blockchain-secured platform for real estate transactions.” Wherever you look, there are a plethora of blockchain-based companies, projects, and organizations all seeking to innovate the real estate industry.
Even if the use of blockchain does not become the standard for property and land transactions, it will certainly have a significant impact on the way it is conducted. Individual investors will finally have a chance to put money in avenues once only restricted to large investment firms, creating a new way to diversify portfolios.