The commercial real estate (CRE) industry has clearly understood the benefits of using blockchain-based tools including smart contracts and distributed ledger technology (DLT) which is why the industry is now focusing on implementing them in its working. The CRE executives believe that the smart contracts can play a major role in real estate and can bring a huge transformation in the core CRE functions such as changing the way property transactions are conducted including purchase, leasing, financing, sale, and management.
The major focal point of blockchain includes residential real estate and commercial real estate (CRE). Blockchain’s database or digitized distributed ledger has the ability to hold records permanently and share information thereby making huge improvements in the business transactions of real estate. This platform stores information in blocks with each block comprising of a timestamp and linked to an earlier block.
At present, the way CRE transactions are carried out is very rigid, time-consuming and expensive. Importantly, the vital information is distributed in dissimilar systems requiring third party intervention such as inspectors, brokers, appraisers, escrow companies, title companies, notary public, and county recorders for increasing access. Such multiple layers during transaction lead to more errors and lack of clarity.
Blockchain-based smart contracts do not require middlemen because anyone can view or record information on this platform. So, everyone having an access has an equal opportunity. Due to this, it is possible for every property to have a digital address that includes vital legal, financial, physical and occupancy information as well as the history of repairs and transactions, CIOReview reported.
Thus, it is possible to access all the data instantly at a single location ensuring that the parties can authenticate property records on their own and carry out the transfer of digital titles in just a click. It radically reduces the risk of fake listings and copied credentials.
Recently during an interview, Maureen Waters, Chief Commercial Officer of Ten-X Commercial forecasted the transformative effects blockchain-based smart contracts, crowdfunding platforms, and cryptocurrencies can have on the transactions in the field of the commercial real estate. Waters said that blockchain is one of the huge trends that have the potential to change investment and transactions in the real estate in the coming years, Commercial Property Executive reported.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]