Real estate is one of the most prominent, valued and well known asset classes all over the world. According to recent reports by expert market analysts, the global commercial and residential properties worth $228 trillion.
Reports say that, Blockchain-integration with real estate can significantly improve the real-estate industry and lower the barriers of entry for the common man. Let’s look at the four most fascinating use cases for real estate and blockchain.
Liquidation and transfer of ownership is the most commonly seen and has become a serious problem in real estate. It often takes years and decades to sell properties. According to Juwai, “Chinese Consumer International Travel Survey, 56% of Chinese investors spend over one year finding their ideal US investment property”.
In general and normal situations, it atleast takes six months for your time to find a property and another six months to fulfill all the formality needed to acquire it. Even if you do find some buyers, you will be locked up in a lengthy transaction process, and the chances are high that it will end in failure.
Linking up real estate with Blockchain makes the transfer of property ownership rights easy and helps in removing all the traditional hurdles that come with lengthy filing procedure with authorities. It increases the chances of liquidating an asset in a short time.
“Back in 2014, Jennifer Merin found out that someone named Darrell Beatty was wrongfully living in a home she had inherited. Beatty forged the deed to the house and moved in. Merin was able to evict Beatty, but the whole process took a year and $100,000 in legal fees”.
As per the stats revealed by the FBI:
There were 301,580 instances of wire fraud complaints in the United States in 2017.
Those wire frauds reported losses of $1.4 billion.
More than 9,600 victims lost over $56 million in 2017.
These frauds and misrepresentation of properties does not belong to a single place or part of the world but can be found in every corner of the world from low level to high level property deals that happen every day. Home title fraud, since many transactions and document requests are now done online, it increases the risk considerably, especially in the hands of savvy criminals.
One of the core properties of the blockchain happens to be immutability. Once any record has been entered inside the blockchain, cryptographic hash functions ensure that they remain immutable. As such, it’s infeasible to tamper with records once entered into the chain. Hence, your property becomes safe and secure.
Tokenization is one of the most important parts of blockchain use. Tokenizing via the blockchain allows you to create usable tokens for any asset – like real estate. Plus, since these tokens will be available on an exchange, liquidity won’t be an issue anymore.
Another interesting use case for a decentralized system is to create token issuance platforms and exchanges by focussing on the infrastructure required to create them. Realio is a perfect example of this.
Realio has a decentralized exchange (DEX) for its users called “RealioX”. Any investor who wants to buy assets on RealioX must get whitelisted through KYC and accreditation tests. Realio’s in-built compliance protocol doesn’t allow users to transfer platform-issued tokens without verification.
The DEX allows users to smoothly and instantaneously trade a large number of assets within the network without having to go through an intermediary. RealioX also has an integrated trading bot feature that helps traders in market-making, hedging, and arbitrage activities.
By seeing the traditional hurdles and problems in real estate using Blockchain technology can really be a game changer and will be useful for people of all kinds.