Real estate has long been a conservative industry. As much as technology has penetrated industries like education, banking, and law, real estate has always been somewhat different. Part of this is down to the way real estate is sold. Licensing for brokers and agents is done on a state-by-state basis. People still meet a salesperson face-to-face when buying a home, which is no longer the case in most industries. Most real estate markets are small, and many offices are small or even sole proprietors. It’s been hard for tech to find inroads into this industry because it can be so challenging to scale up in real estate.
However, as millennials enter the home-buying market, technology is creeping into the real estate business. Part of this is seen in the way people buy homes, and what they look for in them. People search for homes on sites like Zillow and Trulia. Smart homes are becoming increasingly popular. There are suggestions that blockchain and other technologies will make some big changes in the way contracts are handled.
Blockchain is best known as the underpinning of cryptocurrencies like bitcoin. However, blockchain is an incredibly secure way of making transactions. It’s encrypted, time-stamped and each transaction record is packaged as a little “block.” Because the blocks are strung together in a chain, it’s much harder to disrupt the information in a blockchain. Each block has to be hacked manually, unlike a database where lots of records are stored in one place.
Blockchain has real potential for applications like smart contracts. Smart contracts could be a game-changer for the real estate world. Smart contracts eliminate the need for reams of paper. They can be delivered and e-signed, eliminating the need for messengers or postage. Smart contracts eliminate a number of extra steps in the process of purchasing a home. They also add an additional layer of protection via the encryption of blockchain.
Finally, smart contracts could help people verify potential transactions and eliminate concerns around rental scams and fake listings for sales. It creates an additional barrier for criminal activity, making it harder to mislead the public and steal from them. There’s even a possibility that blockchain could be used to register properties, instead of the clunky records systems municipalities use now. It is only a matter of time before the real industry catches up with the rest of the world and goes completely digital.