The real estate sector is one of the oldest industries in the world. In the past few decades, not much has changed in this industry. However, the blockchain could soon disrupt all aspects of the real estate industry.
For instance, most transactions in the real estate sector never go directly from the buyer to the seller. In most cases, there are numerous third parties involved in each transaction. For instance, there are banks, lawyers, agents, and many others. Even small transactions such as paying for parking space usually feature numerous intermediaries. Here are some areas of the real estate sector that are ripe for disruption by the blockchain.
Automated Payments
If you are paying for parking space, it does not always go as expected. In a typical transaction, you have to make payments to a person or machine. The payment is confirmed and you are issued a parking ticket. However, this system does not always work. Sometimes, the machines break down or the person operating the machines makes a mistake.
One company trying to solve this issue is PARKGENE. Using the GENE token, drivers will be able to find and reserve parking spaces in advance using the mobile app. The operator of the parking lot receives real-time updates and there are no complex credit card transaction fees.
Besides paying for parking, other real-estate micro-transactions that could be transformed by blockchain technology are utility payments, rentals, and hotel rooms. With the blockchain, building owners can cut out management companies and secure rental payments using the blockchain and smart contracts.
One company that is working on the rental side of the real estate sector is LockChain. The company is hoping to bring the Airbnb model to the blockchain. With the blockchain, the company will be able to cut out intermediaries, thus elimination exorbitant commissions.
Reducing the Paperwork
Most real estate transactions involve heaps of paperwork. Sometimes, this can be confusing, which also makes the industry quite illiquid. Completing a single real estate transaction can take months before the seller receives the money in their account.
With the blockchain and other innovations such as smart contracts, lengthy real estate transactions can be reduced into a week or less. The smart contracts verify each step of the transaction, which eliminates the need for third parties. It also helps to eliminate the fees charged by these third parties.
REX is a company working on such a solution. Via the REX platform, a buyer receives all the information they need in one place. The system also rewards users who contribute to updated and accurate information about a property.
It Could Lower the Entry Barrier
A few major players currently dominate the real estate sector. This is because real estate investments usually cost millions of dollars. However, the blockchain could help to change all that. This can be done by tokenizing a blockchain project. The result is that the average Joe can make a small investment is a real estate project worth millions of dollars.
Summary
A day might come when blockchain networks replace major banks and other intermediaries in the real estate industry. As mentioned above, the Real Estate markets are one of the oldest industries around. In an industry this old, it will be difficult to embrace change. On the flip-side, if people saw how much more efficient the sector could be with Blockchain, it would make the most business sense looking forward. In the world we live in today, people value time the most. An average real estate transaction can take days if not weeks. Blockchain technology can streamline the process, and make the real estate sector even more lucrative than it already is.
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