Blockchain technology is changing many industries, and real estate is one of them. Before a few years ago, it was almost unheard of for someone to buy or sell high-value assets through the Internet. Most real estate deals used to be done in person.
In this way, smart contracts, which are a part of blockchain technology, have led to new solutions. Tokens can now be made for real estate assets and traded like Bitcoin, Ethereum, and other cryptocurrencies.
Here are some ways that blockchain technology is changing the real estate business:
Adding real estate to marketplaces and trading platforms
The goal of real estate technology has always been to connect buyers, sellers, and listings. But blockchain makes it possible to trade real estate in new ways. The tech has made it possible for online marketplaces and trading platforms to fully support transactions of high-value assets like real estate.
Today you can make use of crypto gateways such as XEROF to buy properties with crypto even with real estate agents that only accept fiat currencies. However, with real estate on trading platforms more and more real estate agents may accept crypto as payment methods.
For example, blockchain technology can make it easier to rent out property and buy and sell real estate. On trading exchanges, real estate can now be bought and sold in the same way that stocks are. You can now buy and sell things online. You can also tokenize assets, which is a lot like selling stocks.
Furthermore, you can sell the tokens on a blockchain exchange to get rid of the assets. The collected tokens can be sold for real money, and the people who buy them will get a share of the property.
Getting rid of Middlemen
Since a long time ago, brokers and banks have been an important part of the real estate ecosystem. Reports say that blockchain technology could soon change their roles and how they take part in asset transactions. In the end, these intermediaries' jobs, like legal paperwork, listing, and payments, would be taken over by new platforms.
If there were no middlemen, both buyers and sellers would be able to keep more of the money they made. Fees and commissions would be less expensive for them. Furthermore, the process will go much faster because there won't be any middlemen.
Better access to cash
Liquid has never been used to describe real estate. This was because of how long it took to close a sale. With tokens and cryptocurrencies, this is not the case. In theory, they can be traded for fiat currencies through exchanges.
Blockchain makes it easy to trade real estate assets as tokens. No longer do sellers have to wait for buyers who can pay for the whole property to get some value out of their property. Now, they can sell the property like they would sell shares in a company.
Partially owning something makes it easier to invest
A big problem with investing in real estate was that many people didn't have enough money all at once to buy the entire property. With fractional ownership, this obstacle to investing has been taken care of. Buying property as an investment usually required a lot of money. Buyers could also find other investors with similar goals and pool their money to buy expensive properties.
Using a trading app, investors can use blockchain to invest in real estate. They can even buy and sell small amounts of tokens whenever they want. Also, they don't have to manage the properties on their own because of fractional ownership. For example, owners don't have to worry about renting out or fixing up the property. Anyone who has invested in real estate knows that keeping it in good condition can cost a lot of money.
It can be hard to deal with tenants, keep leases up to date, and pay for repairs. Property owners can still use and enjoy their property while blockchain transactions are going on. They can use their property as security to get loans and get cash quickly.
Having a share of something
Blockchain also makes it easier to invest in real estate because it makes fractional ownership possible. Usually, you would need a lot of money upfront to buy property as an investment. Investors could also put their money together to buy properties with higher prices.
With blockchain, investors would only need to use a trading app to buy and sell tokens in any amount they want. Also, fractional ownership would help them avoid having to do things like maintain and rent out the properties themselves.
Maintenance alone can add up to a lot of money, and dealing with tenants can be a hassle. This also affects things like lending, where property owners often have to use their homes as security for loans so they can get cash quickly. Depending on the terms, the owners of the property may also be able to keep using it.
Blockchain is a decentralized technology that is trusted and safe. All peers on the network can access the information stored in the blockchain. This makes the information transparent and impossible to change.
One only needs to think back to 2008 and the crash of the housing bubble to see how greed and a lack of transparency on the part of institutions can have terrible effects. A decentralized exchange is set up so that you can trust it.
Since information can be checked by peers, both buyers and sellers can be more sure about doing business. Fraud would also be less likely to happen. As a result, smart contracts would be easier to enforce beyond just the technology.
XEROF is a Swiss-licensed Crypto Gateway that offers exchange services for customers who possess crypto wallets and want to use them as fiat currency to purchase real estate properties and luxury goods.Learn more about XEROF