The real estate industry has taken major strides in the right direction since the recession back in 2007/2008. Market prices are set to rise steadily going into 2019, but despite all this; there are still some tethering problems that plague the industry, making the investment process not as smooth as it should be. The tethering problems manifest in three major ways;
Intermediaries
The presence of intermediaries is a major pain; with agents taking up to 6 percent of the total payments made on a piece of real estate. According to the National Association of Realtors, Up to 80 percent of home buyers continue to pay these fees till date, which is a staggering statistic.
Limited funding options
Real estate is not cheap, and the prices only continue to revise upwards, making real estate out of reach for a majority of the population. A CNBC report stated that it would take 1 million dollars to fetch 270 square feet of prime property at the heart of New York City. This price tag is out of reach for most American’s with only about 10 percent of the population able to afford such an investment.
Fraud
The sector is also riddled by fraud, ranging from online sale scams to title deed fraud. A statement by the FBI revealed that the internet crime complaint center had seen a 480 percent increase in real estate fraud complaints this past two years; this is compared to the real estate fraud complaints in 2016.
So how will the Blockchain help address these challenges;
The intermediary problem
The Blockchain will provide a means of property verification and payment to buyers, thereby eliminating the need for intermediaries such as lawyers and agents. Paying for a property using cryptos also saves buyers from the hefty bank fees they are forced to part with every time they transact.
The funding problem
The Blockchain enables those who are unable to afford the whole of a property, to have the option of buying a piece of it, just like one buys shares. These part owners will receive transferable tokens representing their shares which are easily verifiable on the Blockchain. This makes real estate more accessible to people.
The fraud problem
The Blockchain will help address the fraud issue by easily authenticating the property documents. When a property is transferred, a record is made on the blockchain and a comprehensive history is formed. This makes it easy to verify if a transaction is fraudulent during a sale.
So how can these solutions be delivered to you?
Several companies are working on making these solutions available to the general public. One of them is i-House.com, which has implemented a series of ATO (Asset Tokenized Offering) projects in less than a year. This allows users to crowdfund real estate projects using their cryptocurrency, IHT. The project has so far extended to the Philippines, Thailand, Japan, and the US. The blockchain is definitely set to disrupt the real estate industry positively with projects such as i-House around. It will definitely improve things like land registration, and payment systems.
