How Web3 and tokenization will redefine Real -Estate forever.

Despite their seemingly incongruous nature, blockchain technology and the real estate industry are beginning to show signs of functioning together.

Many web3 real estate projects are taking advantage of blockchain technology's innovation, which includes transparency and low-cost real estate transactions, among other significant advantages.

Given that Blockchain technology has been around for years and has long disrupted the banking business, it is now time for the same to happen in the real estate industry.

When it comes to new technology, the real estate business has typically been a hesitant adopter. But, as the world moves from web2 to web3, can the real estate business afford to be stubborn and adapt at a snail's pace once more?

This begs to question, what does blockchain in real estate look like? What advantages would investors, homeowners, and other stakeholders reap?

Some advantages of blockchain in real estate are:

1. Intermediaries are eliminated

Real estate transactions are extremely expensive; closing fees might exceed $10,000 with all of the lawyers, agents, and over a dozen other people involved.

Blockchain and smart contracts will eliminate the need for dozens of individuals to be involved in the process.

Automating tasks like document verification and mortgage approvals to a piece of code will, in turn, shorten the time it takes to buy a home. Blockchain technology has the potential to alter these established roles significantly.

As an example, instead of waiting months for mortgage approval and the constant back and forth, smart mortgage contracts may be created.

A smart mortgage approval contract could be written by a mortgage broker to grant your mortgage request the moment all paperwork and requirements are delivered and completed.

Reducing the reliance on brokers, banks, and attorneys in these processes should dramatically lower the associated costs and long processing times. This would be a compelling incentive to increase the use of blockchain in real estate.

2. Improved Accessibility

Real estate investing is only feasible for individuals who can afford to buy a home, which is a small percentage of the population. People are often put off by the intricate processes involved in real estate investing.

Blockchain technology offers consumers an alternative; thanks to initiatives like Parcl, you can now receive tailored exposure to real estate by investing in your preferred areas; this is simply possible with the help of synthetic assets, smart contracts, and pricing oracles.

Parcl allows you to trade a synthetic representation of the price return of properties in your preferred areas.

Simply said, you can put money into the neighborhoods you believe in without actually purchasing any property.

3. Transactions are being streamlined

Technology in real estate is typically used to list properties and connect buyers and sellers. However, the use of blockchain technology presents a new way of purchasing and selling real estate by making the entire process trustworthy and efficient.

Propy is a good example of this. This blockchain-based real estate platform streamlines the home-buying process and removes the risk of fraudulent transactions, which amounts to hundreds of millions of dollars every year in the U.S. alone. Removing this risk factor would be a huge success for the real estate industry.

The same is true for mortgage applications; it is projected that one out of every 120 applications will be fraudulent in the second half of 2021. Any inconsistencies inside an application would be immediately recognized with data kept on a digital ledger.

The entire real estate transaction closing process is totally streamlined and all in one location on their platform, making life easier, cheaper, and safer for both buyer and seller. The disadvantage is that you still need a lot of money to buy a house in the first place.

4. Provides Liquidity

Because real estate transactions don't typically include many parties, the market is deemed illiquid. Instead of selling equity to a bank, you may release a bespoke percentage of your home's equity in the form of tokens and place them on the market to be sold among a pool of investors.

Some platforms use an AMM liquidity pool to preserve liquidity when buying or selling assets. A continual pool of tokens enables instant liquidity, which was unheard of preceding the introduction of Web3 technology.

5. Alternative Investment Opportunities

At present, real estate investing is a time-consuming process that includes searching for properties, determining financing possibilities, closing the sale, performing necessary repairs, and collecting rent each month.

It is clear that investing and sustaining an investment are challenging tasks. Traditional solutions, such as REITs, do not require much management. However, the investor has little influence over where their money goes.

Blockchain introduces a completely new dimension to real estate investing.

Assume you are aware that the government is actively investing in the urban development of a nearby town or area within a bigger city. This could cause property prices to climb in the coming years, allowing you to establish a long position in this sector. You would eventually profit from the growth in real estate value.

Another potential blockchain-based investing strategy is tokenized fractional ownership.

By tokenizing property ownership, investors could easily buy and sell tokens. They could also trade fractions of their tokenized ownership instead of full tokens, which isn't possible with traditional fractional ownership products.

Most people like this since it provides them more control over their original investment. The problem with traditional and tokenized ownership is that investors are only given a limited number of investment options.

6. Transparent Transactions

Ownership documents are mostly paper-based, which, as we all know, is susceptible to damage, loss, or fraudulent activity. The legal procedure of transferring ownership can be lengthy and costly, necessitating large sums of money.

Blockchain technology is an excellent solution since all data are kept on an immutable ledger, which may serve as a trusted and dependable source of information for both parties to a transaction.

The Swedish Land Administration even tested blockchain technology for its land register software in order to provide a centralized source of verified information.

We at Snapper were infcat one of the first companies in the world to use Blockchain for Real Estate registration and mutation. Our goal was to bring utmost transparency to the transactions but it seems like in Country like India sometimes corruption just takes over.

7. Effective Supply Chain Management

As governments around the world keep failing to meet their home-building targets, it is more crucial than ever to meet the demands of homeowners. Increasing prices, material shortages, and difficulty estimating demand are some of the issues confronting construction enterprises, real estate developers, and governments.

All of these issues can be mitigated to some extent by using blockchain technology to manage and track materials, give transparent and verifiable data that helps with forecasting efforts, and effectively track where and when resources are utilized, ultimately making home building cheaper, faster, and easier. As a result, prices for the end user are reduced.

Conclusion

There are several ways in which the real estate industry could benefit from the use of blockchain technology. The coming years will be an exciting period to see how things develop.

There is already a slew of interesting real estate projects vying to bring Web3 technology to real estate and real estate investment to the masses.