Is Blockchain The Answer To Real Estate Woes?
It may be years before the blockchain technology can make its way into Indian real estate --- it is in a nascent stage and the world is still experimenting with it. But when it does, the way we buy and sell property is going to see a revolutionary change.
The technology that supports digital currency bitcoin works by creating online public ledgers of transactions. The code-supported technology has the capability to register the movement across asset classes. Experts are of the view that by using blockchain technology in real estate, authorities will be able to change the way real estate transactions are done. From being lengthy, tiresome and prone to frauds, real estate transactions would turn quick, simple and transparent.
Slow and unsteady
As it stands today, a buyer spends a great deal of time before he is able to pick the right property and secure the mortgage. Once he has somehow completed this process, he has to run from pillar to post to find out whether the seller is genuine which would make the process lengthier and in all probability, costlier. A buyer will have to hire a legal expert and a chartered accountant to make sure everything is alright. The same is true of sellers too; they too have to dig out information to ensure they are not dealing with a crook. A platform that would help buyers quickly, verify the details of the seller would speed up the process and bring down the total cost of property purchase.
The lingering fear
While the idea of owing a property in future keeps us excited, we do keep worrying about getting duped. And, there is a reason for that. Across the world, the number of property frauds have gone drastically up in the past. The most-used way to dupe unwitting-naïve buyers is to use fake documents. The blockchain technology is expected to put an end to this practice. The digital database will have a store of original ownership certificates accessible to buyers and sellers which will be almost impossible to duplicate.
Time is money
The blockchain technology can also pave way for faster disbursal of home loans. Today, banks carry out a detailed inspection before they grant you a loan to buy property—from digging out the applicant's credit history to his professional track, financial institutions need every bit of information to ensure their investment would remain safe. This time-taking process that keeps the applicant on the edge also has its costs. Using the blockchain technology, a unique ID could be created for individual buyers and sellers, where all their past records will be registered. This would make the job of banks easier, finally benefitting home buyers.
Making a start
Some countries are already experimenting with the concept. Sweden became the first country to apply blockchain technology in its real estate transactions in July 2016.
Factom, a Texas-based blockchain technology company, will assist the government of Honduras, one of the poorest countries in the American continents, to build a permanent and secure land title record system using the underlying technology.
Delaware-based startup Ubitquity will overhaul the land registrar offices of two Brazilian municipalities, Pelotas and Morro Redondo, by embedding land ownership information into the bitcoin blockchain.
The Republic of Georgia's National Agency of Public Registry has partnered bitcoin mining company BitFury to design and pilot a blockchain land titling project.
The future success of the technology might inspire other nations to follow suit, India included.