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How blockchain can innovate real estate transactions

Blockchain, the fundamental technology for cryptocurrency that supports the use of Bitcoin, but it has steadily acquired new uses in various fields. One of example is blockchain application in real-estate industry. By applying the blockchain technology such as cryptocurrency and smart contract, not only simply making work efficient, but preventing contingencies such as reversing records and default on contracts. The real estate industry is expecting that property management becomes easier and transaction becomes efficient with blockchain technology.

Main points that blockchain innovates existing real-estate business

1 Transactions can be carried out any time, become faster and safer

Generally, in the real estate business, in order to complete the property handover, various processes including finalizing an agreement, mortgage cancellation and registration of ownership transfer are performed by many specialized people and they provide substantial amount of paperwork. If the smart contract platform with blockchain is used for these processes, the property transaction can be done efficiently without additional manual work.

The recorded data in the blockchain cannot be copied, tampered, or deleted, therefore, transparency is secured as data is accurate and reliable, and the recorded data is available for all parties who are involved in the transaction.

The recorded data in the blockchain cannot be copied, tampered, or deleted, therefore, transparency is secured as data is accurate and reliable, and the recorded data is available for all parties who are involved in the transaction.

2  Reducing the transaction costs

In the real estate transaction, expensive transaction costs accrue as many players are involved including financial institutions and brokers. However, by introducing blockchain, the buyer could dramatically reduce the transaction costs, because they can make payments directly to sellers using cryptocurrency.

3  Improve liquidity and reduce the risk of unsold properties

The real estate market is volatile, and a significant number of properties could remain unsold. The submarket of real estate using blockchain may be able to solve this issue. When investors, financial institutions, sellers and brokers register in the system, blockchain will automatically execute all processes related with real estate transactions including loan and insurance contracts. It is gaining a lot of attention as a promotional measure to improve the liquidity lead to effective utilization of unsold properties.

If block chain could solve the problems and complications about owning a specific portion of properties, it is easier for newcomers to participate in the market, and this will contribute to improving liquidity of real estate.

ZWEISPACE JAPAN

ZWEISPACE JAPAN, a publicly-listed company that develops applications for the real estate industry and web services, has obtained a patent for the invention of blockchain based property registry and commenced to provide the service officially from April 2018.

It is drastically alleviating the many steps of ownership registration that this industry is expecting from using blockchain. To this date, there is a time lag of roughly a few days to 7 days and applications are not accepted late at night, Saturday, Sunday and public holidays when the official government agency handles ownership registration in Japan. Nevertheless, convenience is improved with blockchain based registry, for example, ownership is registered almost instantly, application can be accepted 24 hours a day 365 days of the year and the most recent application status can be checked.

The official government land registry costs considerable amount of money, therefore, some property owners who bought or inherited do not pursue the registration process.  In this situation, the ownership stays with the previous owner on the registration certificate and there will be a gap between the fact and the document. However, the cutting-edge technology developed by ZWEISPACE JAPAN is expected to solve this problem.

The general records cannot solve some of scams such as forged notarial deeds and fraudulent deals that bogus land sale targeting a major company which was recently reported. ZWEISPACE JAPAN’s patented blockchain-based property registry has the mechanism to write IoT information in blockchain which is expected to become a solution for the underlying problems that might encounter in real estate transactions.

ADRE is an organization formed by voluntary cooperation which aims to establish a shared platform with cross-industry companies to solve problems that currently real estate industry faces with. ADRE consists of 8 companies from cross-industry including the Japanese property vertical LIFULL co.,ltd that conducts planning and operation of business for LIFULL HOME’S.

You may be face with the situation that the property has already leased when you find a good property or be given wrong information about the age and the floorplans of the actual property. There is a gap between the information you receive and the reality, then you get confused about which information is correct. These problems can arise easily because various companies such as broker, management company, infrastructure company individually hold information about one property in real estate industry.

Specifically, currently as described previously, real estate information is held individually, thus, ADRE aims to consolidate information held by diverse multiple players. This information is not only information about real estate brokerage and management but also all sorts of information related with the property including electricity, gas, logistic and map held by each company.  By focusing on cross-industry information sharing, and improving the accuracy and real time process, it is expected that making business more efficient.

To be commercialized this in the future, many challenges such as data normalization rule, security and distribution of royalties accordance with the contribution degree towards data base establishment remain. However, according to ADRE, they aim for this platform to be commercialized after 2019.

Summary Blockchain is said to bring about a revolution in all sorts of industrial structures. Nevertheless, blockchain and real estate transaction harmonize very well, so if implementation of blockchain is advanced, the real estate industry will make a progressive move we have never seen before. By realizing the society where the real estate transaction can be carried out without fear, the real estate trading will become more familiar business for many people.

Blockchain is implemented in SNS Wrappy and 2.0 cryptocurrency “Proteusion” developed by our company.  We are aiming to provide various services including settlements and remittance services.

http://gts.jp.nttdata.com/eng/event/information/information2.html

https://coinspectator.com/news/352408/real-estate-tech-firm-zweispace-japan-starts-registering-property-sales-on-the-blockchain

https://www.bizjournals.com/bizjournals/how-to/technology/2018/07/how-blockchain-can-change-real-estate-transactions.html

https://www.entrepreneur.com/article/322043

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