Smart Contracts in Real Estate. What to Expect?
The thing that will hardly lose its actuality is the sphere of real estate. And the transactions related to it, operate with considerable sums of money, which makes buyers and sellers go through a certain amount of suspicion.
Agents, inspectors, notaries, and other third-party representatives, don’t add transparency to the process, leading to a vicious circle of distrust.
Smart contracts in real estate cross out the need for intermediaries, associated time delays, and fees. Instead, they provide the process with significant benefits that you can find in the image below.
Though, can it actually be called the future of real estate? Let’s find that out in this short piece of text.
Blockchain playing the first fiddle
To proceed with the story, we need to cover the basics of the technology which has given us Bitcoin and Ethereum, the things that even people distant from IT are aware of.
Data sets, conditioned as blocks and linked together in a chain, set the main concept of a blockchain. It also has to be distributed publicly in a P2P network with some equally privileged peers.
Immutability and transparency are achieved by means of an adopted consensus algorithm on a par with an unalterable cryptographic hash of every prior block.
The features of a typical blockchain are:
- Censorship resistance
- Independence from third parties
- Neutrality regarding its users
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Keeping that in mind, let’s get back to the point of smart contracts from our topic.
Why do we call them ‘smart’?
The attribute ‘smart’, in the context of technology, can be applied to anything with a certain level of automated functionality.
With that said, a smart contract perfectly corresponds to its title. It’s a piece of software, normally not a very big one, or even better to say ‒ a protocol of a transaction.
No sooner than the requirements set in a contract are fulfilled, the deal is automatically conducted.
Obviously, the program isn’t able to assess the soundness or the adequate quality of the contents. It’s all about the procedure only, whatever the conditions are.
Once a contract is set, blockchain technology comes in handy, giving transparency and saving from the lion’s share of intermediaries.
So let’s look at these benefits in terms of real estate.
Smart Contracts ‒ an easy way for Real Estate
What if you want to skip the headaches that go with intermediaries when purchasing some real estate?
Smart contracts, with their features of automation and immutability, will save you from the trouble the human factor carries. Moreover, alongside the blockchain capabilities, all the paperwork starts to seem meaningless. Not mentioning any kind of intermediaries involved.
But as we’ve noted before, the program isn’t all-powerful and can’t evaluate such a thing as the conceptual importance of an interior design.
However, within more standardized transactions, smart contracts set in a blockchain are evidently capable of eliminating the human factor completely.
Further reading: How to Build a Mobile Real Estate App: Tricks of the Trade
Once again, let’s just list the things smart contracts in real estate can provide to be assured they are at least worth considering:
- ability to operate on a stable and decentralized public platform
- elimination of corruption, bias, and delays
- lowering the barrier of entry into the business
- new opportunities for a greater scope of people
If you want to read the full article and learn more about smart contracts and tokenization in blockchain, don’t hesitate to do that: Boosting the Industry: Smart Contracts in Real Estate.
Are you interested in building a real estate tech project, but aren’t sure where the jumping-off point is? Contact Vilmate team to get your project rolling!