How the Blockchain Can Change Real Estate Forever
According to Zillow, homebuyers hand over up to 5 percent of the sales price in closing costs. Closing costs include appraisals, attorney fees, inspections and loan application fees. In addition, it’s a drain on your energy and time. (Closings now take about 50 days.) It might be early for a fintech review of this nascent crypto could-be, but we can still take a closer look at how the blockchain’s likely to be a major disruptor in the real estate industry.
photo courtesy Charlotte Real Estate
Things Can Change Fast
Real estate is a moneymaker for agents, brokers, appraisers, lawyers and other professionals. However, real-estate backed cryptocurrencies could change this forever, saving investors time and letting them keep a larger profit in their pockets. By nature, cryptocurrency transactions are secure, transparent and immediate, and there are no national boundaries in cyberspace. In this model, real estate investors purchase, hold and trade equity via cryptocurrency. Heavy transaction fees and onerous legwork disappears.
Blockchain technology and cryptocurrencies are new, and critics are still skeptical. However, they could fundamentally change real estate. Meanwhile, real estate offers greater stability to cryptocurrencies, making them more secure.
Real Estate and Cryptocurrency
Real estate investors tend to be high net worth people with money to burn. Yet, real estate attached to cryptocurrencies becomes more liquid than traditional real estate or even real estate investment funds. Under this model, properties are valued and managed by industry experts, and property shares take the form of cryptocurrency.
Investors with cryptocurrency enjoy enhanced liquidity thanks to the magic of crypto coins, which are easily traded or converted on an as-needed basis. Actual real estate properties are not very liquid since the process of finding a willing and able buyer takes some time. Investors with blockchain real estate holdings would have more flexibility to manage their portfolio.
Bottom Line
The bottom line is that blockchain and cryptocurrencies are a new market. However, they present an unprecedented opportunity to disrupt the profitable but slow business of real estate investing. This secure and low-risk model presents new opportunities to streamline large fees and long processes inherent in traditional real estate deals.
Real estate-backed coins provide an opportunity for investors to join the cryptocurrency craze. In fact, blockchain and real estate are great examples that these two investment types make a great combination. Follow this trend, along with other ways the blockchain has disrupted traditional business practices, through fintech reviews. You may find yourself jumping into your first real estate deal in the blockchain.
Author: Jacob Maslow
