Smart Contracts in Real-Estate Transactions

Real estate and property management are huge and lucrative markets that involve many stakeholders and transactions. However, they are also plagued by inefficiencies, fraud, and disputes. Buying, renting, selling, leasing, property development — real estate transactions are complex and sluggish. Mired with documents, broker fees, and agents, the housing market has a high barrier to entry with convoluted, time-consuming processes.

Smart contracts bring about a tremendous amount of key benefits in making real-estate transactions more efficient and transparent:

• Immutable Record-Keeping: Smart contracts and NFTs exist on the blockchain, meaning that they are held immutable through distributed ledger technology. Property ownership and other information can safely be stored on the blockchain, creating greater transparency for all interested parties.
• Speedy, Secure Transfers: With verified digital identities — for the buyer, the seller, and the property itself — payments can theoretically be as simple and speedy as a few clicks on the computer. From the weeks, months, or years of waiting for transaction finalization in traditional real estate, it could now occur in a few digital seconds.
• Automated Transactions: Because of smart contracts’ automatic execution, the fear surrounding title transfers is alleviated. Sellers don’t want to transfer the title until the payment is received in full. Buyers don’t want to provide full payment until the title is transferred. Using smart contracts, this process is streamlined and transaction time and fees are reduced.
• Ensuring Compliance: Real estate smart contracts can ensure compliance with the agreed terms and conditions of the real estate transactions. They can also facilitate verifying and validating the property data and ownership.

Implementation of smart contracts has resulted in many sweeping changes to the real-estate industry:

• Eliminating intermediaries: Real estate smart contracts can eliminate the need for agents or brokers who charge high fees or commissions for their services. They can also reduce the risks of fraud or manipulation by third parties.
• Empowering users: Real estate contracts enable users to buy, sell, rent, or invest in properties without geographical or financial barriers. Users can also access more information and options in the real estate market.
• Cost Saving: Eliminating intermediaries in smart contracts removes additional fees, facilitating buyers and sellers to interact and transact directly and do so with fewer transaction fees.
• Improved Transparency and Trust: Because of blockchain's immutability & transparency, any data stored once cannot be tampered with by anyone at any point. That makes smart contracts trustworthy - having every transaction transparent and available on the Blockchain.