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The use of smart contracts goes beyond just real estate sales but also in contractor agreements, lease agreements, automated payments, financing agreements, and a wide range of other areas in the real estate market.
What are some of the convincing reasons to consider using a smart contract when purchasing your next property?
Real estate has and will for long continue to be among the wealthiest industries around the globe.
And for anyone who is smart enough to incorporate technology for insight and as a source of guidance in decision-making, much revenue you can earn as an investor is unbounded. The benefits can even be much more with the use of real estate smart contracts, so read on to learn why.
Just like with many other industries, the impact of Blockchain technology on real estate is rapidly taking up shape. In the simplest of terms, a smart contract is basically an agreement between two parties (buyer and seller), but now in a digital form that uses a technology similar to that of cryptocurrency – blockchain.
The agreement is usually in the form of lines of code that exist and is distributed in the increasingly famous decentralized network. The code is responsible for controlling the execution of transactions, which are indeed trackable and apparently irreversible.
One of the biggest advantages of blockchain technology is that it allows monetary transactions between completely anonymous parties without so much fear of being defrauded. Well, in the real estate world, smart contracts are usually programmed to allow execution when and only when certain predetermined conditions are met.
Moreover, they allow property buyers to purchase property from wherever they are on the globe without necessarily disclosing their personal information.
Smart contracts will help avoid the need to constantly “update” statements within your agreement. When this is done manually, it is very easy for the wording of a contract to be overridden by an untrustworthy party(s) when things turn sour. Moreover, smart contracts allow real estate transactions to be finalized with ease and faster compared to navigating paperwork.
Smart contracts allow for an asset to be sold without any extra personal or financial risk for the seller.
Of course, this does mean that you might have to put your trust in the smart contract code but that is a risk you are willing to take when buying a home. The convenience of not having to share personal or financial information with a property seller can come as a pleasant surprise.
One of the big advantages of smart contracts is that they allow sellers to set a selling price that is much lower than the actual market value. The buyer will get the property or real asset only when the agreed sale price is fulfilled, and a release of funds is in place.
Since the legalities, paperwork, and processes to navigate when purchasing property are minimal to none, you can save a lot of money by going through the purchase transaction using a smart contract.
In real estate, it is important to know that a typical smart contract will only take into account the current prices of real estate and, in the process, will price the property according to its current status.
The code may also pre-qualify the buyer and provide evidence that the buyer is not in default. All in all, these are factors worth considering when using a smart contract as a property buyer or real estate investor.
Smart contracts have revolutionized several industries, but many real estate agents and brokers are still reluctant to use them because of their limited use. Of course, like any new technology, it may take a while before it takes over, and only then will its appeal be fully understood.
Whether you’re well conversant with blockchain or understand nothing literally about it, the above few points should minimize your doubts as far as using smart contracts is concerned.
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