What if the greatest real estate breakthrough happened and we all missed it?
The future for this industry is, fittingly, rooted in technology. More specifically, the blockchain. Blockchain and real estate actually have more in common than you think.
At MGA, we like to stay ahead of the curve by educating not only ourselves but also our clients on what the future holds. In this blog, we take a look at what blockchain is and how it will likely transform the real estate industry.
What Is Blockchain?
You might think that blockchain technology is too complex to understand. However, you don't need a computer engineering degree to see how it works.
As you know, the internet led to the advent of cryptocurrencies such as Bitcoin. However, one of the downsides of cryptocurrency is that it can be challenging to track and record transactions. The blockchain acts as a kind of public ledger for such online transactions. This ledger creates a permanent record that cannot be altered or destroyed.
In this way, blockchain helped transform cryptocurrency. And now, it's poised to transform the real estate industry in three significant ways.
- Property Data Upgrade
The first big benefit of blockchain real estate has to do with property data. Specifically, this tech can boost MLS property data to benefit sellers and buyers alike.
The existing multiple listing service is flawed in many ways. The decentralized information is difficult to ask, and you practically have to be a real estate pro to understand it all.
With blockchain, we now have the potential for a shared, centralized database that allows everyone real-time access to all pertinent information. More information means more buyers, so everyone wins.
- Smart Contracts
One of the big headaches about real estate is the need to involve intermediaries. Historically, everything from identifying addresses to handling escrow has involved finding an intermediary and dealing with tedious paperwork.
Blockchain real estate opens the door to so-called "smart contracts." Such a contract uses computer code to review, complete, and enforce contracts between buyers and sellers.
With such smart contracts in place, plenty of the "middlemen" can be cut out of every real estate transaction. And that translates to saving time and money for both buyers and sellers.
- Avoiding Fraud
Perhaps the scariest aspect of modern real estate is fraud. Both buyers and sellers have more to lose in these transactions than they have to lose with any other transactions.
Part of what enables fraud in traditional real estate transactions is the paper record-keeping. Such records are easy to steal, alter, and redistribute. With blockchain tech, all transactions are fully transparent and impossible to alter. And when appropriately executed, blockchain can be used to eliminate the threat of fraud entirely.
This offers an unprecedented peace of mind for buyers and sellers. And this has the potential to transform 21st-century real estate forever.
Blockchain and Real Estate: The Bottom Line
It’s only a matter of time before blockchain and real estate start changing the game, and MGA is here to think ahead with you. We have many clients in the real estate industry who we help with everything from financial advice to strategic business planning.