Its platform enables transparent real estate transactions. Propy’s blockchain technology records every step of a real estate transaction, from expressing an interest to signing a contract to transferring ownership. The real power of the blockchain technology lies in automating the execution of transactions using its potential to create partial ownership of real estate assets through the use of tokens that can be traded on blockchain-based exchanges, which opens up investment opportunities in the real estate market.
The key technology of blockchain takeaways influences the real estate industry in many ways, offering buyers and sellers new ways to connect. There are opportunities for blockchain in many aspects of commercial real estate transactions including title search, financing, leasing, purchase, sale, due diligence, cash flow management and payment management including cross-border transactions. Blockchain technology can also be used to eliminate intermediaries in real estate transaction processes and reduce costs.
Blockchain real estate also facilitates fractionalization, the division of owners “equity into purchasable parts, often referred to as tokenization or democratization of an asset. Blockchain allows property owners who need funds to sell one of their assets through a token offering and sell a percentage of their equity to fund the newly acquired asset. The digital tokens on the blockchain represent ownership of the property, and the owner can sell the tokens to avoid the hassle of selling a home using traditional methods.
By symbolizing a property in the blockchain, developers can eliminate the need for traditional bank financing and free it from traditional sales schedules and restrictions on investment in the property. With tokenisation on blockchain, retail investors can trade a fraction of a property. Instead of buying all or part of a property, you can buy tokens that are tradable on a blockchain exchange.
When real estate tokenization is issued via blockchain, it becomes easier to buy, sell or trade a real estate asset through a blockchain platform where transactions can take place and be verified. Tokenised real estate assets can be traded on an exchange and transactions can be carried out immediately. These businesses reduce their liabilities as they are not responsible for the property.
Blockchain technology allows several people to buy tokens for a particular property and share ownership. For example, if a 100-unit apartment building is owned by 50 different investors who have secured residential and commercial real estate via blockchain, each investor can acquire a blockchain-owned token that reflects ownership of the property. When a property changes hands, the digital token transaction is recorded on a blockchain, creating a transparent history of land ownership.
Decentralized recording technology designed to bring confidence and authenticity to digital transactions can be used to create more efficient solutions for commercial and residential real estate, from property acquisition to due diligence and crowdsourcing investments. Atlant has developed, for example, a platform that uses blockchain technology to facilitate real estate transactions. Another digital blockchain-based solution has been developed by Swedish Land Authority Lantmateriet in collaboration with the blockchain startup Chromaway, Swedish telecommunications giant Telia Company and several real estate developers.
Blockchain-based real estate is gaining popularity as a means for buyers, sellers and investors to interact and learn more about real estate. With the introduction of smart contracts, blockchain platforms are enabling them to tokenize assets such as real estate and trade in cryptocurrencies such as Bitcoin and ether. While the first applications are still ten years away, blockchain has matured beyond a single use case of value transfer and can now be used to verify, secure and automate a large portion of real estate transactions.
Blockchain is a common, invariable register that makes it easier to record transactions and track assets on a corporate network. It is a hyper-secure, hyper-informed ledger that enables all transaction participants to verify and audit the transaction, thereby reducing risks, costs and risk for all types of transactions. It also speeds up contract processes, saves time and reduces costs.
Although the technology can be difficult to understand, the basic idea behind blockchain is simple: it provides an independent, verifiable and reliable record of events and transactions. Imagine, in real estate, a verifiable record of ownership data that not only enables the parties to a deal to know each other, but also to trust that the seller can unambiguously identify the true ownership of the property and that someone else is not claiming ownership of the property. A clear and indisputable history of records is important, and this is only possible because of the technology used in blockchain that can help make the process more efficient and efficient than what is happening today.
Cryptocurrencies use blockchain capability to act as a ledger for a vast computer network, with the ability to track transactions and records that can be used across industries, not least real estate. While cryptocurrencies are being adopted by the established real estate industry, companies are using blockchain technology to capture returns and other related transactions. Blockchain also introduces new ways of trading real estate and enables trading platforms and online marketplaces to support real estate transactions.
Platforms like Natmin, for example, focus on using blockchain to facilitate fiduciary transactions and reduce closing times and costs. However, real estate that uses blockchain can also facilitate transactions that are faster and more secure and do not require expensive third-party trusts. Though blockchain has the potential to disrupt real estate – be it an $18 million deal in Aspen or smart contracts that make purchasing a home as easy as buying toothpaste – real estate professionals will continue to thrive.