Crypto and blockchain are not only applicable to the financial industry. They are flexible and can be integrated into different industries, sectors, and business models. At the moment, there are so many use cases for both technologies, and more are coming to fruition. One industry that has endless possibilities with blockchain is the real estate industry. This is due to its adoption of smart contracts.
Are Smart Contracts The Future Mediators?
In normal P2P events, one party can default on a contract. To avoid contract defaults, one would normally get a broker or lawyer involved to avoid conflicts. Due to the level of maturation, getting a lawyer involved in blockchain-based transactions and contracts can be a difficult task.
However, smart contracts can be deployed to perform the functions of a broker or lawyer, in an automated way. A smart contract controls or executes the legalities needed for the execution of a contract’s stated terms. This is an innovation to cut out intermediaries and other overhead costs. Simply put, Smart contracts are self-engaging agreements that rely on blockchains and computer code. They create an environment where a contract or agreement is automatically executed and documented based on its agreement or terms.
With traditional terms and agreements, third parties can slow the process down because they have to deal with documentation and paperwork. We cannot ascertain whether smart contracts are the future mediators, but they do a good job of mitigating contract defaults.
Real Estate: Past, Present, And Future
Real estate can be lucrative in different parts of the world due to property appreciation. It will always be a big business as long as humans keep moving, procreating, and bringing development. Even though real estate has been around since time immemorial, the industry has not been proactive with tech adoptions.
A major problem that has plagued the real estate industry is the lack of trust between clients and agents. Clients believe that most of the agents only care about their commission checks.
While trust is an issue, there is also the problem of having different third parties involved in one purchase. The banks, estate agents, lawyers, home inspectors, risks and compliance agents, etc. are involved in the deal. The different parties are getting their cut from the deal, and do not forget the involved documentation and paperwork.
Real estate procedures are basically the same way they were 20 years ago, which leaves the door open for monetization. With the integration of smart contracts, a trustless ecosystem is created, and the processes cannot be altered or manipulated to favor corrupt practices. Furthermore, it mitigates the need for unnecessary third parties that increase the cost and slow the process down.
Smart contracts and cryptocurrency make it easy to buy and transfer properties without the usual fanfare of unnecessary activities.
It is a perfect solution that favors both the client and estate agents. At the moment different real estate companies have made the switch, including Bithome, NuWire, Glen Oaks, etc.
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