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The real estate sector has seen significant growth since the recession. With the expected rising market prices and millennial demand in 2019, the industry is more welcoming than ever. Although the market is improving, it is still plagued with problems that make the investment process less convenient than it should be.
Main drawbacks of the real estate sector
Real estate investments have three main disadvantages: the presence of intermediaries, the lack of accessible financing options and fraud.
Agents occupy up to six percent of total payment on real estate. This means that brokerage fees would represent over $ 23,000 for a house that costs $ 400,000. Unfortunately, up to 80% of homebuyers still use an intermediary and continue to pay these taxes on the basis of a report by the National Association of Realtors.
Buildings are also expensive and prices continue to rise, limiting access to much of the population. According to a CNBC survey, an investment of $ 1 million will probably result in about 270 square feet of prime ownership in New York. However, only 10 percent of US residents can afford such a price.
Finally, the commercial real estate sector is full of fraud, not only in the United States, but also globally. According to a statement by the FBI, the Center for Complaints on Internet Crimes recorded a 480% increase in property fraud complaints in 2016. These crimes, including securities fraud and online sales scams are aided by the rarity of reliable platforms in which real estate documents can be verified
How exactly can the blockchain solve these problems?
A blockchain is an immutable ledger where transaction data can be recorded. Its advantages include transparency, traceability, accessibility and advanced security. If implemented in real estate, these properties can solve its main problems.
Blockchain real estate platforms eliminate the need for intermediaries such as lawyers and agents provide a means for verification of ownership and payment to buyers. Paying property using cryptocurrencies can also help buyers bypass bank charges. Reduces commissions associated with efforts by offering smart contracts that can be tailored to the needs of users.
The tokenised nature of cryptocurrencies like Bitcoin and Ethereum makes it possible to manage real estate. Those who can not afford to buy the entire property can simply buy a part of it, how to buy shares in a company. These investors will receive transferable tokens that represent their actions and can be easily verified on a blockchain. This makes real estate investment accessible to more people.
Blockchain can also prevent fraud in the industry by providing a way to easily authenticate property documents. When these properties are transferred, their records are added to the blockchain and a complete history is created. In case of sale, buyers can easily check if the property is fraudulent.
Bring blockchain innovation in real estate
Several companies are working to bring these solutions to the commercial real estate sector. One of these companies is i-House.com, which has implemented a number of ATO (Asset Tokenization Offering) projects in less than a year. These projects allow users to finance real estate development projects using IHT, the company's cryptocurrency. So far, their reach has extended to the United States, Japan, Thailand and the Philippines.
The i-House ATO model provides real estate accessibility and a verifiable platform for related transactions. By implementing such a concept in the industry, the i-House ATO platform is positioned to positively interrupt it. I-House.com Chairman and Founder, Ricky Ng., Said:
"We aim to create a shared economy resource management ecosystem around the world, i-House ATO offers real estate owners, developers and end users the means to easily own and share resources"
Cryptocurrency authorizing real estate investors worldwide
IHT has recently been listed on the Bittrex Exchange and South Korea's largest exchange, UPbit. IHT is currently listed on nine other exchanges, including Cashierest, KuCoin, Gate.io, Coinw, LBank, HitBTC, CoinBene, CoinTiger and Allbit. The company has stated that it hopes to be listed on major global exchanges in the future.
The future of real estate blockchain
Blockchain offers the opportunity to change the way in which real estate transactions are handled. Currently, from the land registry to the origin and payment systems, there are many room for improvement. With better systems, there will be more incentives to invest in the sector and further support economic growth.
Because companies like i-House.com make these changes to the industry, the real question is how others will follow. Will it be one of those things that will not become mainstream until there is a crisis in the industry? We may have to sit down and watch.
Author: Hazel Agoni
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim to provide you with all the important information we could obtain, readers should do their research before taking any action related to the company and bring full responsibility for their decisions, nor can this article be considered as an investment advice. .
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