How

Anyone who has purchased a house through a mortgage will know of the arduous task ahead. If you are in a chain, then the masses of paperwork can be one of the reasons the process is so slow. In some cases, it can also cause the whole sale to collapse. The blockchain is one solution, offering smart contracts to buyers, sellers, and involved parties in a bid to speed up the process. 

 

What Is a Smart Contract?

 

Smart contracts are digital agreements with a predetermined set of conditions. Run using blockchain technology so that their can be both automatic and - in relation to house sales, in particular - simultaneously, reducing room for human error or loss of time. When the criteria are fulfilled, the contract is executed. It could be when funds have been released, or an event like a survey has taken place. 

Consider all the parties involved in the mortgage and home-buying process. There can be a pre-approval, an offer through solicitors and estate agents, and further paperwork from the mortgage company. Added to this are inspections and then all the same again from the seller's end, as they also try to buy another house. This paperwork is vast, and each person is waiting for approval from the next one before they can move on.

This process would be streamlined with a smart contract. If everyone's details and the prerequisites are stored on the blockchain, everyone knows what is going on. For example, once the bank approves the mortgage, the smart contract can let all parties know. This is better than the long chain of paperwork that usually follows.

Currently, the only companies that work with this level of speed in real estate are those that buy property for cash. These companies appeal to people searching for ways to sell my house fast. They can achieve that because they have quick offers and all of the contracts in place. In many ways, this is similar to a smart contract. It cuts down the need for middlemen and paperwork, which can increase the time a sale takes. 

 

Nigeria’s Use of Blockchain in Property

 

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 To solve two major problems, Nigeria is pioneering the use of smart contracts: the first is that the country has a backlog of nearly 1 million land registration cases waiting to be dealt with. By putting smart contracts in place, it is believed this will speed up the process, allowing authorities to catch up on the mounting workload.

Secondly, the country has a huge problem with land fraud. As records are poorly kept, and with Nigeria’s chequered history of land ownership, finding out who owns what is tough. Even high-ranking officials have been known to take advantage of this. By logging land on the blockchain using immutable contracts, it is hoped it can be finished once and for all. 
By no means are smart contracts the answer to all property issues. However, they do provide a way to speed up the often convoluted and confusing process of buying property. However, until it is more widely accepted, you may be forced to take your time and use the traditional route.