Four Things You Need to Know to Make the Switch to Blockchain-Based Real Estate

Desireé Duffy  |


Home buying is one of the most important purchases a person will ever make.

That's why, in the process of buying a home, many of us depend on the guidance and the handholding that real estate agents provide. The human element can make it easier to make these big transitions and receive the right advice to feel confident in our decisions.

It might be scary to think that in the future, the real estate industry will soon be dominated by a new-age technology, the blockchain. Even scarier, is the fact that we don’t really understand what the blockchain is, does, and why everyone claims it is about to take over the world. This “Godzilla” technology might sound daunting to even the most tech-savvy real estate agent or the traditional homebuyer, but understanding how it works, will not destroy the very industries we have grown accustomed to. Instead, we will become quick to welcome its many possibilities.

In its simplest form, the blockchain is a medium of record keeping. Here are the basics of how it works:

As a real estate agent, many times, you will find yourself frantically digging through paperwork, brushing up on the terms agreed upon, so you can close the sale. According to Piper at Crypto Realty Group, “We’ll be able to program the rules of each property transaction including disclosures, contingency periods, loan information and escrow instructions, drastically cutting down the time and energy it takes to gather the information and generate the documents.” With smart contracts, the blockchain will do the busy work for us, giving us more time to do what we do best, close the sale.

It takes a village to raise a child, but it also takes a village to house that child. Buyers and sellers, along with their agents, escrow officers, inspection and termite vendors, lenders, and title representatives are all involved in the process. Luckily, everyone on that list can track the progress of the smart contract, staying informed when a new process has been executed, in order to avoid wasted follow-up and the unsettling feeling of being in the dark.

You’ve all probably heard of and worried about title fraud at some point in your homeownership experience. In your head, it goes like this. The con artist first takes your identity, then goes on to forge your documents, to sell or re-mortgage your house, with just the stroke of a pen. This damage can all be avoided on the blockchain, where transparency to everyone involved provides visibility to any breakpoints along the way. It is now possible to convey title on the blockchain; transforming the ways we will express title in secure and stable formats.

Wouldn’t it be nice if we could prequalify buyers before they even stepped foot in a showing? How about prequalifying clients with their financial backgrounds and attaining a simple hash number to reference and verify their qualifications soon after? Loan transfers would then take 48 hours or less, pairing clients with lenders that suit their particular needs. This all becomes possible on the blockchain.

And while the blockchain will make the real estate agent’s life a lot easier, it will most importantly, make the quality of life better and safer for the buyer.“We as agents still have a fiduciary duty to our clients to keep their sensitive information safe and secure. We can choose what information gets disseminated on the blockchain; social security numbers, bank statements, and other private documents can be referenced with another hash number, letting the trusted user know where the physical information is stored,” says Piper.

While blockchain users pride this technology on removing the middleman, in real estate, this process likely will maintain its human-centric approach. Everyone involved in this industry will benefit from more transparency, security, and quick turnaround time. With the peace of mind that the blockchain provides, buyers can now begin to make their house a home.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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