How Colorado HomeFront will use Blockchain Technology and Crypto to Change the Way Real Estate in is Bought or Sold in the Future
There’s no doubt that the rise in blockchain technology and cryptocurrency is here to stay. So, as a real estate company, you can either choose to embrace this technology or miss out on the major opportunity that this new technology presents.
It’s hard to find an industry in which blockchain and cryptocurrency haven't impacted, and real estate is no exception. We’ve seen cities proposing bills that allow people to pay their property taxes or city fees with cryptocurrency, and buyers are paying for multi-million dollar homes entirely in Bitcoin.
Colorado HomeFront is one of the companies that are pioneering the shift and embracing the new technology. The companies that do so will be able to expand their business and reach customers that may not have been possible to connect with previously. That’s why Colorado HomeFront plans to use blockchain technology and cryptocurrency to change the way real estate is bought and sold in the future. Read on to find out exactly how they plan to do it.
Benefits of Blockchain in Real Estate
You may think that there is no place for blockchain in the real estate industry or there are no practical applications that blockchain could be used. However, there are plenty of advantages that come with using blockchain in real estate, including:
● Loans and mortgages
● Reduced costs
Loans and mortgages
The mortgage industry has yet to catch up with the technology that other real estate industry segments have adopted. Loan applications and underwriting are unstandardized, and closing documents are still paper-based. The security of loan documents and data is left to interpretation, and safeguarding the data requires a lot of work.
Blockchain can benefit the banking industry since it provides a single version of verified data, real-time payment settlement, and the ability to safely share data between organizations and parties involved in the transaction.
Introducing blockchain and cryptocurrency into the real estate world will make a historically illiquid asset one that can provide liquidity to homebuyers and investors. Real estate can readily be traded as tokens, which means sellers don’t have to wait for buyers with the full amount for the down payment in liquid funds.
Decentralized networks reduce the considerable expenses that come with conducting real estate transactions. Third-party fees like property inspections, loan fees, recording fees, and transfer taxes will be reduced by introducing blockchain technology into the real estate industry by eliminating the fees charged by intermediaries.
How Colorado HomeFront Will Use Blockchain and Cryptocurrency
Blockchain technology enables “smart contracts,” which is a self-executing contract that outlines the agreement between the buyer and the seller. Blockchain uses smart contracts by storing the lines of code across a distributed and decentralized network that monitors the execution of the agreement, which makes these contracts trackable and irreversible.
Examples of contracts that can become digitized on the blockchain include:
● Listing agreements
● Offer sheets
● Letters of intent
● Closing documents
Using smart contracts instead of paper contracts will speed up the entire transaction and eliminate the need to meet with bankers and lawyers. It also ensures that everyone involved in the transaction has peace of mind that all documents and sensitive information are secure.
As a decentralized platform, blockchain technology is accessible to everyone on the network, making all data transparent and unchangeable. This lack of transparency contributed to the financial crisis of 2008, which had catastrophic consequences for the real estate market.
Decentralization exchanges build trust and reliability into the system since all information can be verified, and buyers and sellers will have more confidence when conducting their real estate transactions. The decentralization of blockchain technology reduces the number of fraud attempts we see because of smart contracts, which come with more enforceability of the terms of the agreements.
By using blockchain’s inherent transparency, Colorado HomeFront can reduce the typical expenses of entering into a real estate agreement. Costs like title fees, homeowners insurance, and closing costs are reduced under the region's jurisdiction where the transaction takes place. Tech-enabled companies like Colorado HomeFront will shift to eliminating the need for paperwork, insurance, and audits in the future.
Accepting Payments in Blockchain
The possibility of accepting payments in the blockchain is another exciting prospect for real estate companies, homeowners, and tenants. Many startups are emerging as leaders in accepting payments in cryptocurrency.
In 2021, one California startup announced that it would accept Bitcoin as a rent payment for its residential and retail properties. They’ve also invested millions of dollars into the technology that enables them to accept payments in cryptocurrency. Many other companies are betting on cryptocurrency on a long-term basis and are buying into the fact that cryptocurrency is here to stay.
Real estate investment is also becoming a reality for many potential investors who lack the necessary capital to purchase a property with full ownership. Introducing fractional ownership into real estate lowers the barriers to entry in becoming a real estate investor when traditionally, investors would need to put at least fifteen to twenty percent of the purchase price as a down payment.
Blockchain will enable investors to access a simple-to-use trading app to buy and sell partial shares of tokens at their discretion. This investing strategy also eliminates the need for fractional owners to become involved in managing the maintenance and leasing of the property.
The Bottom Line
Introducing blockchain into the real estate industry will benefit those who choose to adapt to the technology. It will speed up the loan and mortgage process, improve liquidity, and reduce the expenses that typically come with a real estate transaction.
Colorado HomeFront is revolutionizing the way that blockchain is used in real estate. Led by Alexa Elliot, you can expect to see many changes in the upcoming years in how real estate transactions from the innovation of Colorado HomeFront.