Thanks to its popularity, diversity, and huge profitability potential, the housing industry is one of the most commonly considered markets for investments. And, like many other industries, it so appears that real estate is decently taking up speed as far as consuming new technology is concerned – finally!
People rely on technology to find a property of their liking, sell homes, get mortgages, and even find tips to make their transactions easier. So, should you be using blockchain tech to buy a home?
What Is Blockchain Technology
In simple language, blockchains are massive repositories for information storage and distribution. The tech relies on multiple computers that are linked to a central system to create a record of all the activities performed within the system.
Thus, any exchange or transaction can be seen as a list of blocks that are arranged in an organized manner. This approach enables a decentralized environment.
Blockchain in Real Estate
As it appears, the use of blockchain technology in real estate is among the most hotly debated topics in this age and day. And considering how cryptocurrency managed to thrive even in Washington amidst attacks, doubt, and opposition, left, right, and center, it is safe to say that its future is promising in the real estate industry.
This is largely because, despite its decentralized nature, blockchain technology helps improve transparency, reduce fraud, and enhances transaction speed, all while guaranteeing information security.
How Technology, Blockchain Reduces Risk When Buying a Home
As hinted earlier, technology helps amplify opportunities in real estate. This is not only for buyers but also for sellers, real estate developers, and continuous investors. In a recent piece by reporter and author Kelsi Borland, it was pointed out that CRE technology mitigates investment risks when strategically implemented as a hedge against inflation.
Let’s look at a few ways real estate blockchain tech makes home buying less risky.
Through Fraud-Proof Smart Contracts
Smart contracts are self-executing contracts that keep track of all the transactions related to real estate. They utilize decentralized databases to keep track of sales that are to take place.
These contracts contain the details of transactions and ensure that any information pertaining to a transaction is taken down and recorded on a decentralized ledger that is accessible to the public.
The best part is that the data is protected under a high-security protocol, plus the transactions can’t be reversed once they take place. What’s more, the transaction is only executed when the buyer receives the asset and vice versa.
Minimizes Human Error by Cutting out Paperwork
Recent data indicates that more than 30% of real estate transactions fail annually, and one of the reasons is related to documentation. With blockchain technology, you can cut out a considerable amount of paperwork that goes into a transaction.
Half the time, less paperwork also means eliminating human errors that might otherwise bite into your profits, cause inconveniences, or even lead to costly lawsuits.
Increases Transparency and Trust
Blockchain technology offers real estate investors an extensive level of transparency. Thanks to smart contracts and the ease of access to information, you can know more about the project or property than before with blockchain technology.
Since information is shared in a public ledger, it means that transactions can always be traced in case a deal turns sour.
Saves Time
If you’re buying a property that you intend to sell within a specific time duration, blockchain technology could be a better way to go compared to traditional processes. It makes the home buying process easier and way much faster, thus minimizing the chances that an identified client may have found an alternative property before you close the deal.
The risks of buying a property can be significantly lower with the adoption of blockchain technology. And as much as the concept is or might sound relatively new, it’s increasingly gaining popularity around the globe. Hopefully, the above piece brought you up to speed on several ways that the mother technology of crypto can help reduce risk in real estate purchases.
