5 Ways Real Estate Agents & Brokers Can Profitably Use Crypto
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Cryptocurrencies such as bitcoin and Ethereum are becoming increasingly popular because of their ability to transfer value across borders without relying on banks or other financial institutions.
As a result, blockchain and cryptocurrency are disrupting traditional industries, including commercial real estate. The real estate sector is a prime candidate for adopting these new technologies. While the adoption of blockchain in real estate has been somewhat gradual, there are numerous examples of how the technology can be used to make the industry more efficient.
Cryptocurrency has also opened up new opportunities for real estate agents, brokers, and other professionals by making payments easier and less expensive than before. Here, we’ll explore how real estate brokers and agents can profitably use crypto in their businesses.
What Is Cryptocurrency?
Cryptocurrency is a digital asset that uses cryptography to secure its transactions and control the creation of new currency units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.
Cryptocurrencies are often bought and sold on decentralized exchanges and can also be used to purchase goods and services. Ethereum, another popular cryptocurrency, uses blockchain technology to enable its users to send and receive payments without the need for a third party such as a bank or financial institution.
Cryptocurrencies are volatile, meaning their prices can fluctuate dramatically. This can lead to rapid capital gains or losses for investors.
What Is Blockchain Technology?
Cryptocurrency, like Bitcoin, is changing how people pay for things, becoming increasingly popular by providing faster transactions and lower processing fees than traditional payment methods without sacrificing security. This is possible thanks to blockchain technology.
Blockchain is a decentralized database system that records every transaction in a public ledger. In fact, it is the foundation of cryptocurrencies like Bitcoin. Because blockchains aren’t controlled by one entity, there is never a singular point of failure that compromises the entire system.
If something goes wrong or if an attempt to compromise the ledger is made, the blockchain can always revert back to a previous, more secure version of the data and start over from there.
Real Estate Agents and Blockchain Technology
The implications of blockchain technology for the real estate industry are huge. Imagine offering a piece of real estate for sale without ever having to show it to prospective buyers or selling a commercial property without having to wait months for the closing date. These ideas might sound farfetched now, but they’re not far off from becoming reality.
As blockchain continues to evolve, we’ll see even greater innovations in the real estate market that will likely allow real estate professionals to grow their businesses and keep their clients happy.
#1 – Faster Transactions
Blockchain technology could change how people buy and sell real estate. A blockchain is essentially a distributed ledger where every node adds information about transactions.
This eliminates the need for an intermediary, such as a lawyer, and makes it possible to cut out middlemen altogether, saving all parties involved a lot of time as a result. For you as a real estate agent or broker, this not only saves you money but may also pleasantly surprise your clients.
#2 – Fewer Commissions and Fees
The buyer and seller may both end up paying fewer commissions and fees for buying and selling property. They simply agree on terms directly and use smart contracts (programs that run when certain conditions are met) to automate the process.
There’s no need to transfer funds through a clearing house or another third party that, as a result, would charge for its services.
Smart contracts allow parties to set up rules and conditions for specific actions. For example, you might want to automatically send a payment once certain criteria are met.
If both parties agree to those rules, the contract becomes enforceable. This allows you, as a real estate agent or broker, to save money as well as set up transparent, enforceable terms for each deal.
#3 – Secure Real Estate Tokenization
Real estate tokenization allows anyone to become a real estate investor without having to spend thousands of dollars upfront. Instead, you purchase tokens that represent fractional title ownership in a piece of real estate. You can use those tokens to rent out properties, trade them with others, or even resell them.
This system lowers the barrier to entry for people who wish to invest in real estate because it removes the cost of buying expensive real estate, expanding your potential base of customers as a real estate agent or broker.
Since blockchain is immutable, there is very little, if any, chance of fraud. Once purchased, real estate tokenization cannot be lost or stolen.
#4 – Transparency
Cryptocurrency can increase the level of transparency in real estate transactions. Blockchain technology can give buyers access to information about properties they might purchase.
They can see property ownership history, current market value, and even view photos of the piece of property, allowing a broker or agent to better evaluate the deal as a whole based on historical activity and other important factors.
The transparency of blockchain technology also makes it easier for sellers to sell quickly and efficiently. Sellers can list their properties online and immediately receive offers. If a buyer accepts one offer, the seller could receive payment in full in as little as 24 hours. Imagine closing a commercial deal for a client almost as quickly as it took you to open it!
#5 – More Accessibility
Using cryptocurrencies and their blockchain technology makes buying property easier for people who may not be eligible to buy a property through traditional means.
Some companies will lend cryptocurrency users up to 50% of the loan if the user puts up a certain type of digital currency as collateral. As a result, cryptocurrencies open up more opportunities for investment potential.
Using cryptocurrency for real estate investment also allows for greater, more efficient international investment, as money doesn’t have to travel through nearly as many nodes before finally reaching its intended destination. This allows you, as a real estate agent or broker, to open up your market to more potential customers.
Benefiting from Crypto as a Real Estate Professional
Real estate professionals can benefit from the use of cryptocurrencies and blockchain technology in many ways.
This technology can allow you, as an agent or broker, to sell a property faster by decreasing the time it takes to receive offers and close the deal, keeping your clients happy and growing your own business at the same time.
There’s still much work to do before cryptocurrencies like Bitcoin and Ethereum make a significant spot for themselves in the real estate industry. However, the potential benefits are enormous.
Do your research, stay diligent, and happy investing.
List & Browse Commercial Real Estate for Free on MyEListing.com!
You can list and browse commercial real estate for free right here on MyEListing.com.
Simply sign up for a free account and get unlimited access to accurate local market intelligence, customized property type alerts, comp software, and more.
Other recent articles
Article Search
Share
All Article Categories
