10 Ways To Use Blockchain In The Real Estate Business

Cryptocurrencies and blockchain have added another dimension to the financial world. With the growth of these technologies, it is hard to find a sector that they have not impacted.

The real estate sector has not escaped blockchain technology either. The real-estate transactions that used to happen face-to-face have been shifted to digital mode, thanks to blockchain.

Here are ten ways real estate businesses can use blockchain:

1. Record keeping

Using blockchain, different stakeholders can store their data on a decentralized platform. The Service Level Agreement (SLA) can be tracked easily and made available in real-time. Businesses can maintain a golden database accessible to authorized users to validate transactions and records and flag fraudulent transactions and fake documents.

2. Smart contracts

Smart contracts automate the transfer of ownership between buyers and sellers. It contains all the terms and conditions of both parties. In case of any breach, the contract terminates itself, leading to a void transaction. Smart contracts provide a safety net to buyers and sellers during this interaction. These contracts eliminate agents and intermediaries.

3. Verification of money sources

Blockchain facilitates real-time accounting. The process is automated, and the property ownership details and cash flows are recorded on-chain. Thus, it helps identify the correct sources from which the real estate company receives money.

4. Real estate tokenization

Blockchain enables the tokenization of real estate properties allowing parties to trade them in small shares or parts. These tokens can easily be traded in the secondary market, similar to the trading of shares. Tokenization provides liquidity and affordability benefits to the parties as they do not have to own complete properties.

5. IT infrastructure and ecosystem development

By shifting the processes onto a decentralized platform, blockchain enables the digitization of the real estate business. This helps develop the overall IT infrastructure of the organization. The real estate business can ensure greater accuracy and transparency with less dependence on manual work.

6. Property registry management

Blockchain is used in property registries for the secure transfer of property. The current system of property registry is full of duplicity and inefficiencies. Blockchain helps eliminate this problem by providing a decentralized, transparent, and more reliable solution. It also helps speed up the registration process by eliminating mediators.

7. Property insurance and protection

Currently, property insurance claims are scattered and are controlled by multiple parties, making claims resolution a challenging and lengthy process. Blockchain collects and analyzes data in real-time, thus making the processes faster and cheaper than at present.

Separate policyholders and insurers can track and manage physical assets digitally. Thus, the blockchain can codify business rules and provide automated claims processing, leading to a permanent audit trail. Blockchain also makes onboarding new clients quicker and more efficient.

8. Smart mortgage and e-wallets

The loan and underwriting process is unstandardized and paper-based. The mortgage and security structure is unorganized, and protection against double-pledging becomes challenging. Trading and asset servicing decisions are often based on obsolete data.

Blockchain eliminates these issues by providing a single version of verified information, secure data sharing, non-changeable transaction monitoring, and real-time payment. It digitizes the mortgage and includes information about ownership rights and loan payment history

9. Customer support service

With the processes shifting to digital mode and records being kept in real-time, real estate businesses can enhance their customer support service using blockchain. Blockchain allows minimal human intervention; thus, claims redressal can be faster and more efficient. The customers do not have to wait long for the company to resolve their issues.

10. E-notary service

An e-notary service allows the official to carry out the notarizing function digitally. The e-notary affixes the authorized seal and digital signature to the documents. This process requires cryptography and a secured public key to manage, create, store and distribute the certificates.

Blockchain guarantees the users the integrity of the data on the chain. The information on the blockchain is tamper-proof and non-repudiable. Blockchain cannot completely replace the traditional notary service (as of now) but can only enhance it. The areas where this technology can be used to provide e-notary service are:

• Proof of existence
• Proof of ownership
• Document ownership transfer

Wrapping up

Blockchain benefits the real estate sector due to its reliability, speed, permanence, and security. Thus, businesses working in this sector must understand this technology and its implications to make the best of it. For blockchain-related services, experts at Idea Usher can be of great help.