How Crypto is Set to Change Property Sales – Smart Contracts and NFT Deeds

Smart Contracts

Most people these days know how useful blockchain technology is. But when you dig for details, they prove a bit hard to pin down. With smart contracts and real estate, you can show non-crypto people how useful blockchain technology actually is. What are smart contracts?

Some cryptocurrencies use smart contracts on their blockchain with the main one being Ethereum. A smart contract is a precursor to AI. If a program sees that a set of rules are being met, it will yield the result in very simple terms. Often the inputs are diverse, and the outcome of the results will be something different.

How are smart contracts used in real estate? Real estate transactions have one big problem. They take a long time and are very detail-oriented. Property title deeds can have restrictions and rules that need to be properly checked and matched up with registries. Simple things like changing the owner on a deed can take months. This means that property takes a fair bit of time to change, even if the funds are immediately available. It causes untold misery to millions each year who want to sell the property and buy a new one.

Smart contract platforms are already solving the problem of this issue. With a great deal of success, if I may add. How do smart contracts work in real estate? Each house has all its deed information entered into a database. When facilitating a transaction this information is being married up with the other required information. Such as a mortgage lender that needs to have a charge on the deed, as well as adding the same individual that is getting the mortgage.

All this information is being put into a system. Providing all permit parameters are being met, the deed will change digitally and instantly. This is fantastic for four reasons.

  • All the information is being transferred in a secure way by end-to-end encryption. Storing the details of the transactions on the blockchain.
  • The information can get lost. This is a big issue in real estate, especially around the land boundaries and access. With smart contracts, all their details, boundaries, and access are being stored on the blockchain.
  • Nobody can tamper with the information because it is secure and encrypted.
  • It’s much faster. A computer can process a transfer in seconds. Humans might take days trying to verify the information.

NFT Deeds

One of the biggest real-world use cases for NFT’s is in the real estate industry. Just like a normal deed, NFT deeds provide the same things. Proof of ownership, contractual terms about what can be done with it, and a basis for buying and selling.

This concept of digital land deeds in the form of NFT’s has the potential to shake up major industries. It’s centered around owning digital real estate and converting that into streams of passive income. Projects combine real-world real estate data and create NFT’s out of locations. Data like legal documents, images, and maps.

People from all over the world will be able to invest in the U.S. housing market. They will be able to do it through a fractional share, investing, and tokenized ownership. People can buy real estate tokens that correspond with the property of their choice. With this investment, you’re going to start earning interest via a smart contract when someone pays you rent. Therealt.co website is a good example of this.

Just imagine, this will be a quick transaction with no paperwork. No, endless driving around looking for the right house. There are no expenses on maintenance, water, and electricity. The list goes on.

Selling your NFT will also be easy and simple. Just place it on a marketplace like OpenSea on sale. Interested parties will buy or bid on the property. You’ll receive payment for your property via fiat or cryptocurrency. Everything is being recorded and done on the blockchain.

Conclusion

Blockchain has numerous advantages. It is capable of eliminating the need for a trusted third party to mediate digital transactions. It is capable of centralizing real estate data. We can now quickly access and transfer title records as a result of this. Smart contracts reduce the likelihood of fraud and hacker activity.

Many cryptocurrencies operate on a decentralized platform, which makes ownership transparent. Blockchain essentially eliminates intermediaries and many of the fees that come with them. A few years from now this will be the new normal for real estate property.

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