Will blockchain technology eliminate real estate agents?
Anyone paying close attention to the changing times in the real estate industry would definitely notice that there have been obvious changes in the real estate industry. The real estate industry has actively been evolving pretty fast, as it seeks to be more efficient and accessible. This evolution is evident in its adoption of new technology like blockchain and automation. This evolution, however inadvertent, affects real estate agents, or realtors as they are commonly called. This article seeks to discuss the effects of real estate’s adoption of technology like blockchain, and how it affects realtors.
But first, let’s briefly discuss the role of blockchain technology in real estate’s evolution.
Real estate and blockchain technology
Blockchain technology is obviously one of the biggest innovations in the history of humanity and the internet. Generally, blockchain technology has enabled decentralization. Blockchain refers to a ledger that cannot be altered where information and transactions are recorded and accessible for everyone to see, thus making blockchain technology transparent.
Real estate transactions are usually very complex and often involve quite a number of parties like the buyer, the seller, and other intermediaries like realtors, lawyers, escrow companies, etc. Of course, these intermediaries play important roles in real estate; they facilitate real estate transactions, handle the paperwork and technicalities, and most importantly reduce the possibility of fraudulent transactions.
However, if the primary parties concerned, that is the buyer and the seller, are somehow able to trust each other, would there still be a need for these intermediaries? Blockchain technology has facilitated an ecosystem where parties in the real estate industry can trust each other. Traditional real estate transactions can be very complex, take a long time to be completed, and also cost a lot because of the number of parties involved. With blockchain, however, all parties involved have access to the details and status of real estate transactions; the transactions are also faster and the possibility of fraud is eliminated.
The golden question to be answered now is: as the automation that blockchain technology enables is adopted in real estate, would the need for real estate agents be eliminated?
Real estate agents and blockchain technology.
As real estate continues to adopt real estate technology, and real estate transactions are increasingly executed as smart contracts; the need for intermediaries and third parties like real estate agents would be significantly diminished and altered, if not eliminated.
Blockchain technology could eliminate real estate agents because property ownership and its transfer could be easily negotiated and transferred without the influence of third parties. Blockchain technology would make real estate transactions easier, faster, and more secure. It eliminates the verification and paperwork required to carry out real estate transactions. This implies that real estate agents can be bypassed in these transactions.
Asides from making real estate transactions faster, easier, and more secure; one of the other ways blockchain technology would disrupt real estate is through fractional ownership. Blockchain technology enables micro-investments in real estate. Potential real estate investors can make investments in real estate with as little as a dollar, as a result of tokenization. Property owners in a community can also collectively make democratized decisions that affect their community by voting through blockchain technology.
We can conclude for a fact that blockchain technology will radically change the real estate industry. However, will blockchain technology eliminate real estate agents? Well, many experts believe it would gradually replace them as it gets increasingly adopted.
Existing real estate agents can however support blockchain technology by acting as ‘data miners.’ They will be able to verify and store real estate transactions on-chain instead of the conventional off-chain systems. This means that in some essence, real estate agents are still useful to real estate investments on the blockchain.
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