How the Real Estate Market Can Be Revolutionized with Blockchain Technology
Real Estate Market of Today:
For high-value transactions such as real estate, it is vital to ensure the integrity and accuracy of the records in order to prove the rightful owner of the said property. These records are used to protect the rights of the asset owner in the event of theft, frauds or dispute. In fact, some of the biggest legal cases due to frauds or dispute revolves around real estate.
Other problems include the time required for the actual transfer to happen (months usually) and the integrity of the escrows being used in the process even though the escrow is meant to provide protection for the buyer and seller in the exchange.
Utilizing one of the applications of the blockchain technology called “smart contracts”, transfer of the property rights can be done swiftly when the terms between all involved parties have been agreed. The technology will also be able to provide traditional property registries with an easier and faster way of managing their records.
Real Estate Market of Tomorrow:
Adopting the blockchain technology, we aim to provide solutions to the following problems:
- All Round Transactional Costs
Cutting out inflated costs by parties such as developers, taxes, brokers, and agents. The total cost of buying and selling a property in the Philippines is at times inflated to as high as 24% of the property value. We are looking to cut that total costs down by at least half.
- Integrity and Security
The decentralized nature of the Blockchain technology ensures that records stored on it cannot be changed or controlled by a single source, thus providing security against malicious attacks such as hacking.
- Transparency of Transfer
Information stored on the blockchain is accessible by all which makes the data transparent and immutable. The possibility of frauds and ownership dispute can be almost eliminated with the high degree of transparency.
- Time and Costs Savings
The current process of ownership transfer can take months due to the various parties involved and the need to verify the documentation during various stages, usually with the assistance of a lawyer. The blockchain technology will be able to address the above by maintaining a uniform source of information for all the parties that are involved in the transaction. Also, emerging platforms focusing on other functions such as payments can be integrated in future. The project will also be providing a platform for listings.
Currently, the Swedish government has already launched a blockchain based program to manage land and real estate titles ownership. Using smart contracts, the program success is projected to save the government approximately €100 million per annum.
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