While bitcoin and cryptocurrencies are the most popular tools leveraged from the blockchain, this distributed ledger technology (DLT) provides a wider range of benefits. These tools are recently being adopted by the commercial real estate (CRE) industry. CRE executives say that blockchain-based smart contracts can play a greater role in their industry. Blockchain technology can transform core CRE functions such as property transactions like sale, purchase, financing, leasing, and management transactions.
Stepping stones of blockchain are residential real estate, and commercial real estate (CRE). Being a digitized distributed ledger or database that permanently records and shares information, blockchain makes revolutionary improvements in real estate business transactions. The information is stored in blocks; every block includes a timestamp and a link to an earlier block.
The blockchain has the potential to change the way real estate works. CRE transactions tend to be rigid, expensive, and time-consuming because, vital information is kept in disparate systems that require the use of middlemen-including brokers, inspectors and appraisers, title companies, escrow companies, county recorders, and notary publics to increase access. These layers lead to a lack of clarity and probability leading to errors.
Blockchain doesn’t need many middlemen because it gives an opportunity to anyone for recording or viewing the information. It facilitates every property to have a digital address with occupancy, financial, legal and physical information, and a history of transactions and repairs. All data can be accessed and be available instantly in a single location. Parties can authenticate property records themselves and transfer digital titles in just a click. The risk of copied credentials or fake listings will diminish radically.
Blockchain technology will play a major role in CRE transactions as a tool for reducing costs, diminishing errors, and improving efficiency. In the near future, it may be possible for a household customer to buy a house and complete the sale by just clicking on a shopping cart on a website. The blockchain will ensure that the customer purchases the house and the seller receives the cash instantly and securely.