The state of the real estate market directly reveals the strength and health of an economy. Indicators like property prices and existing home sales act as a barometer for the industry stalwarts to work towards increasing the transparency and legal enforcement within the industry.

Today, the real estate market–with all its pros–is also wrought with inadequacies like bad sales practices, undefined rules on mortgages, and non-lucrative property investment schemes. 

But fortunately, the growing adoption of blockchain in real estate has largely helped the sector address these challenges and take up opportunities waiting to be grabbed. And if you’re looking to build your own blockchain app, here are some of blockchain’s use cases in real estate that you may want to know:

1. Processing Property Transactions

Blockchain’s core strengths are being utilized to handle the billions of dollars changing hands on commercial and residential property markets daily. The technology’s trustless nature allows for direct transactions between buyers and sellers without involving an overseeing institution to verify and validate those transactions.

Further, some realtors are taking things up a notch by implementing smart contracts: these ensure that a seller-buyer transaction only takes place if specific conditions are met. So, blockchain in real estate continues to revolutionize online payments and the remittance sector at large.

2. Transparency and Security of Transactional Records

Blockchain in real estate has been able to eliminate the need for external supervision of transactions. Then, its immutability and decentralized nature further add to its immense potential to improve security across the real estate niche. 

Every member of a blockchain network shares one, easily-verifiable transactional history, which guarantees transparency across the whole network. Besides, records once stored on the blockchain cannot be changed.

The technology helps prevent and detect fraud, store data, and achieve regulatory compliance and due diligence. All of these features collectively allow blockchain to serve as a single, irrefutable point of truth. 

3. Easy Transfer of Title Process

Blockchain-based systems automatically guarantee the legitimacy of the transfer of title. In this way, blockchain cracks a whip on third-party validators of transactions or title companies as soon as they try to meddle with the verification process.  

Also, as blockchain platforms directly connect buyers and sellers, the need for real estate agents becomes redundant. Thus, there are no hefty property commissions.

4. Urban Planning

Property development generally occurs without valuable input from the community. As such, the public feels disenfranchised from planning processes. 

Blockchain-based planning platforms include educational resources, token-based participation incentives, and a feedback loop between stakeholders. This encourages community engagement and better integrates local communities in the property development value chain. 

Eventually, public confidence and realtor services improve; the perfect formula for sustainable success.

5. Loan and Mortgage Securitization

There is no standard loan origination and underwriting process. Further, it majorly relies on paper documentation. Moreover, security structuring is undefined and double-pledging of assets is an uphill task. 

Then, trading and asset servicing decisions are usually made based on outdated data. Lastly, cash reconciliations across lifecycle events generally incur settlement delays. This impacts investor cash flow.

Blockchain offers banks one version of verified information, secure data sharing, immutable transaction monitoring, and real-time payment settlement. Also, a digitized loan or mortgage can be programmed to include relevant data like ownership rights and loan payment history to support future servicing decisions. 

6. Asset Management

Identifying the true owner of the traded property has been one of the biggest challenges in real estate.

Blockchain uses programmable Smart Contracts and Non-Fungible Tokens to grant digital rights. Thus, the technology can streamline the entire value chain of assent management: from client interaction to asset tracking and reporting.

Here’s how it can be done:

• Client Onboarding

The whole customer identification or KYC process is time-consuming. Blockchain can significantly reduce the effort required for KYC as every transaction on it is transparent and traceable for other network participants. As a result, onboarding occurs more quickly and smoothly.

• Trade Settlement

When sellers and buyers use Smart Contracts, they ensure that there’s unbiased fulfillment of every condition included in the contract. Due to the autonomy of Smart Contracts, neither party can interfere with the contract execution process once the rules are settled and agreed upon.

• Regulatory Compliance 

Blockchain technology guarantees that Smart Contracts comply with the regulations of a specific industry, location, or international laws. It offers a single source of credibility for blockchain participants. 

Besides, as it works on a distributed ledger, it can faster process the news and data that can influence the trades and traders’ decisions. 

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Final Note

As evident from what you’ve read so far, Blockchain has brought radical changes to the real estate sector. As a result, the industry is becoming more accessible to a wider number of people. 

Even the buyers who can’t afford to buy a house in one payment now get an opportunity to invest in their property in tokens. At the same time, real estate services are becoming cheaper, more transparent, and more secure.

We at Code Brew Labs keep building apps on blockchain for an endless number of niches. If you’re planning to create a blockchain app for real estate, choose us as your blockchain app development company and see your business soar!