Cryptocurrency & Blockchain in Real Estate

16.11.23 09:43 AM Comment(s)
The real estate industry, like many other sectors, is undergoing a revolutionary transformation. Blockchain technology and cryptocurrency are at the forefront of this revolution, reshaping the way real estate transactions take place.

 From property management to transaction data security, the implications of these digital technologies are profound. In this article, we’ll take a look at how blockchain and cryptocurrency are already changing the real estate industry, how they’re likely to develop in the future, and how advanced real estate software like Rezi is already making use of them.

Speeding Up Real Estate Transactions

Blockchain technology's rise is indeed redefining the entire real estate sector, especially in the way real estate transactions are conducted. Historically, the labyrinthine web of steps involved in property transactions often made the process cumbersome. This not only involved multiple intermediaries in addition to estate agents, including government agencies and legal entities, but also relied heavily on paper-based documentation which often slowed down the process and increased the possibility of errors or fraud.

With blockchain, however, this paradigm is shifting. At its core, blockchain offers an immutable, decentralised ledger where every transaction is recorded. Estate agent software integrated with blockchain can automatically validate property data, ownership details, and the veracity of the documents involved, thereby ensuring that the entire transaction process is streamlined.

Smart Contracts: The New Norm

Smart contracts play a pivotal role in property transactions. Agents now employ estate agent software integrated with blockchain technology, allowing them to automate many aspects of the sales processes.

For example, the use of smart contracts in the blockchain ecosystem accelerates transaction speed. These self-executing contracts with the terms of the agreement directly written into lines of code can initiate property transfers, rent payments, or even property management tasks once the predetermined conditions are satisfied. This eradicates the need for middlemen in many instances, which in turn reduces transaction costs.

Cryptocurrency in Real Estate Investing

The landscape of real estate investing is undergoing a paradigm shift, powered by the advent of digital assets like cryptocurrencies. Traditionally, real estate investments were tethered to conventional financial systems and currencies. However, today, the blend of blockchain technology and cryptocurrencies is reshaping this narrative.

Cryptocurrencies, beyond being just digital currencies, represent a new form of asset class in the global real estate market. They offer property owners, estate agents, and real estate agencies a novel avenue to diversify their portfolios and tap into a more liquid and inclusive investment ecosystem. The transparency and security provided by blockchain transactions make these investments more reliable and traceable, reducing potential fraud or disputes in property transactions.

One of the most transformative innovations brought about by this fusion is fractional ownership. Previously, investing in prime real estate, especially in the commercial sector, was a privilege of the elite, often requiring significant capital. Fractional ownership democratises this process. Through blockchain technology, real estate assets can be tokenized, with each token representing a share of the property. Multiple investors can then acquire these tokens, allowing them to hold a fraction of the property's value. This not only makes real estate investing more accessible but also allows for better liquidity since these tokens can be traded much like stocks.

Moreover, estate agency software and cloud-based platforms are evolving to integrate blockchain and manage these fractional ownership transactions. This ensures seamless, transparent, and secure property transactions, further bolstering confidence among investors.

Reduced Risk of Fraud

Fraud is always a very real risk in the real estate industry, which is why due diligence and AML checks are an essential part of the compliance features we’ve integrated into our powerful real estate agent software, Rezi.

Blockchain technology, with its decentralised and transparent nature, offers a revolutionary solution to mitigate fraud risks in the real estate industry. Traditional real estate transactions have multiple intermediaries, and each stage presents opportunities for fraudulent activities. Blockchain, however, ensures that all property transactions are recorded on a public ledger, making any unauthorised change nearly impossible. Estate agents and real estate agencies can now rely on estate agent software that utilises blockchain to validate property ownership, transaction data, and the authenticity of property documents.

With real-time reporting and immutable records, blockchain technology provides a robust shield against common fraudulent practices, ensuring transparency and security in real estate transactions.

A Look to The Future For Real Estate Professionals

Blockchain and cryptocurrency are poised to continue their disruptive trajectory in the real estate and lettings industry. Their influence is not just fleeting or superficial; they're set to usher in long-term transformations that reshape the very fundamentals of the industry.

For example, think of how integration between blockchain and IoT technology could revolutionise the letting process. With blockchain-based smart contracts, the lettings management process can be automated and linked up with IoT. For instance, upon verifying the renter's payment, a smart contract could automatically unlock a rental property's doors or grant access to the renter, reducing administrative tasks and enhancing the rental progress.

That's not the only way that blockchain and cryptocurrency may continue to shake up the real estate market. The future might see decentralised property and lettings listings where properties are listed on a blockchain, ensuring accurate, tamper-proof, and real-time data. Moreover, with the borderless nature of cryptocurrencies, the barriers that once made international real estate acquisitions or rentals cumbersome could be reduced. This can unlock global real estate markets for investors and renters alike, fostering a more interconnected global real estate ecosystem. As a first step towards this, we’ve recently created a new auto banking solution for property managers in our Rezi PM software. This is enabled by integration with Yapily, an open banking infrastructure platform making payments more secure and accessible using an open API. 

Cryptocurrency and blockchain technology will undoubtedly usher in major changes for real estate businesses, so estate agents need to stay educated about the emerging tech and how it can transform their operations. With this new technological revolution underway, it's an exciting time for estate agents! 

Try It For Yourself

Here at Dezrez, we're excited to have partnered with Coadjute to integrate its network built on bank-grade blockchain technology into our powerful real estate agent software. Helping create safe, secure, and friction-free transactions with real-time visibility over the whole process, our Rezi and Coadjute integration allows estate agents to become more efficient and provide the best possible customer service.

And, because Coadjute integrates effortlessly with our existing systems, there's no need for real estate agents to work across multiple platforms – everything you need is in one robust estate agency software.

Rezi, our estate agency software, gives you the tools to take your real estate business to the next level. Plus, as a cloud-based software, it's super easy to implement and get started with.

So, what are you waiting for? Book a demo of our real estate and letting agency software today or get in touch with our friendly team to find out more about all the features that can take your estate agency and customer relationship management to the next level.