Why Real Estate Needs Blockchain
In 2016, the real estate transaction volumes in the U.S. totaled $491 billion. While the sales of U.S. homes decreased dramatically in the wake of the 2008 financial crisis, they’ve been on the rise since 2011. In 2016 alone, 560,000 houses sold throughout the country.
As the real estate industry begins to grow once more, lots of financial specialists are indicating that it should start looking toward blockchain.
And for good reason:
The Bitcoin network is more powerful than 500 supercomputers working together, and alternative currency Ethereum now has a global market cap of more than $27.2 billion. The industry is growing, and it’s reshaping the way private consumers and companies alike regard currency.
One place where crypto has been relatively slow to take on, though, is the real estate industry. As TechCrunch has previously reported, the real estate industry has mostly overlooked the benefits of blockchain technology, even though using the technology could increase transparency, slash fraud and improve the entire user experience of finding and purchasing new homes.
Were the real estate industry to accept the reality of cryptocurrency, though, it would immediately enjoy these benefits:
1. Faster Transactions
The introduction of blockchain tokens would eliminate the requirement that agents conduct title searches to secure title transfers.
In fact, blockchain would allow agents to immediately prove a transaction’s authenticity and transfer titles quicker than ever before. This may well render escrow companies obsolete.
2. Greater Data Security
One of the biggest benefits of crypto in real estate is that it stands to increase the security of online data storage. Not only will this help ensure the safety of digital property records, deeds, surveys, and plats, but it could also impact the security of multiple listing services.
3. Increased Transparency
Real estate transactions are notorious for their involvement of intermediaries.
Each back-and-forth requires the assistance of a title insurance agent, an escrow professional, a loan officer and many other individuals. This creates opacity that can lead to friction.
With the implementation of blockchain, though, much of that friction would disappear. Because blockchain would allow all transactions to happen withouta middleman, all information would remain fully transparent, which boosts consumer trust.
4. Get Rid of Title Insurance
The adoption of blockchain would do away with the need for title insurance, which would make real estate transactions more efficient and transparent.
For people who can’t afford a real estate attorney to inspect real estate contracts, blockchain would also level out the economics of buying and selling property.
5. Greater Availability of Information
Information is one of the most valuable assets in an entire real estate transaction.
Fortunately, blockchain removes roadblocks to information and makes it highly valuable and accessible for everyone involved in a real estate transaction.
This, in turn, cuts down on the risk associated with real estate transactions and makes it easier for all parties to proceed with complete clarity. It also shortens the response time for information requests and makes needed details easier to find.
The Case for Crypto in Real Estate
While other industries across the globe are adopting crypto at a rapid rate, the real estate industry is still lagging behind.
However, the good news is this: were the real estate industry to decide to embrace crypto, blockchain would quickly revolutionize the process of buying and selling property, and would rapidly change the industry for the better.
By getting rid of many of the traditional roadblocks of real estate, such as third-party verifications, the involvement of multiple middlemen, and informational opacity, blockchain would make real estate more secure, transparent and accessible for people from all backgrounds and walks of life.
When the real estate industry decides to go crypto, it will enjoy the perks that come with saving on needless expenses, like title search and filing fees, not to mention the potential to buy and sell within a revolutionized asset class.
Read the original article published on December 16, 2017.