“Buying real estate is the single largest personal financial transaction any of us makes in our lifetime. It also carries the maximum ‘other extra charges’ that we wish we did not have to incur. Fees, commissions, and taxes! Who loves any of those. “
by Purva Wright
The time is ripe for a disruptor !!!
Who will benefit from Blockchain in Real Estate?
1. Buyers and Sellers: Property search through block-chain-enabled MLS. Greatly simplified process of transacting real estate with less paperwork and administrative overheads. Most secure form of transaction recording that enhances trust between all parties. Greater global exposure to property listings in a standard manner. Greatly reduced transaction costs for both the buyer and the seller.
2. Real Estate Agents: Blockchain enabled MLS Listings. Salespersons and brokers can focus on providing more value-added services while minimizing time spent on creating and managing listings, filling forms/agreements etc.
3. Lawyers: Greatly simplified process of transacting real estate with less paperwork and administrative overheads/costs.
Why is Blockchain surging in popularity across industries
Blockchain is a technology that powers crypto currencies.
It is the most secure way of recording transactions in a centralized ledger that is distributed across the internet. An entry/transaction in this ledger is transparent and immutable. The entry cannot be altered through any means without collusion of the entire internet which would be impossible.
Blockchain’s exponential popularity is because of its inherent security, fault tolerance, and transparency.
It is being adopted across the board in a wide range of industries. Each industry may simply have variations and/or extensions of the above reasons for its adoption; for example:
Banking: Bring trust, simplicity, operational efficiency and enhanced customer experience to banking and payment services.
Financial markets: Use blockchain’s shared immutable ledger to track and manage every step of the financial process, no matter how big or small.
Healthcare: Healthcare payers and providers rally for blockchain’s for clinical trial data, regulatory compliance and electronic medical records (EMR).
Government: Pioneering government organizations are embracing blockchain to boost efficiency and collaboration.
Insurance: Automate transaction processing and reconciliation, help protect parties and their interests, and ensure accurate valuations for insured items.
Supply chain: Add greater visibility and efficiency across the entire supply chain to deliver higher value to your customers and trading relationships.
Identity: Improve authentication and consent of executed government services to increase identity protection.
Voting: Elections require authentication of voters’ identity, secure record keeping for tracking votes, and trusted tallies to determine the winner. In the future, blockchain tools could serve as a foundational infrastructure for casting, tracking, and counting votes — potentially eliminating the need for recounts by taking voter fraud and foul play off the table.
How is Blockchain relevant to the Real Estate industry
The pain points for buying and selling property include a lack of transparency during and after transactions, copious amounts of paperwork, possible fraud, and errors in public records. Blockchain offers a way to reduce the need for paper-based record keeping and speed up transactions — helping stakeholders improve efficiency and reduce transaction costs on all sides of the transaction.
Real estate blockchain applications can help record, track, and transfer land titles, property deeds, liens, and more, and can help ensure that all documents are accurate and verifiable.
Tech startup Ubitquity already offers a Software-as-a-Service (SaaS) blockchain platform for financial, title, and mortgage companies. The company is currently working with the Land Records Bureau in Brazil, among other stealth clients, to input property information and record documents through blockchain.
Specific opportunities in the Real Estate industry
1. Speed-up the Transaction Process
With the blockchain tokens, there would be no need for title searches or a middle man to secure the title transfer. By using a blockchain-distributed database to prove the authenticity of the transaction, a homeowner could transfer title quickly without the need for a third-party verification. This technology could very well disrupt the real estate industry by making the escrow companies obsolete.
2. Increase Transparency
One of the largest costs associated with real estate transactions is the lack of transparency, and the second arises from transaction friction due to so many middle men (think escrow, title, insurance, brokers). The blockchain allows all transactions to happen peer to peer, with no middle men and with all information recorded in a fully transparent manner. This will lead to efficiency and trust!
3. Secure Online Data Storage
More than a cryptocurrency, blockchain technology allows for secure online data storage. This could be used in the future for storing of all property records, including deeds, plats, surveys, title chain, etc. Blockchain may eventually be a part of the multiple listing services as well. Uses other than cryptocurrency may eventually be more common.
4. Be Cost Effective While Trusted
Blockchain will eliminate the need for title insurance and add efficiency and confidence to transactions. It will also add transparency across the entire purchaser platform, so that economics such as not being able to afford an attorney will not be a factor in understanding title and ownership issues.
5. Make Good Information Available Openly
“The most valuable commodity I know of is information” — straight from the mouth of Gordon Gekko himself. Blockchain will be a repository of information. Much of this information, once properly entered, will be very valuable. When organizations have good information, and that information is available openly, the risks to all parties involved in any transaction with that organization are diminished greatly.
Conceptual Solution for Blockchain in Real Estate Transaction
The steps bellows show the Blockchain based future of Real Estate transactions:
The opportunity
India can take the lead across APAC region and the world given the level of digital savvy that exists within our population. Technology centers in Bangalore are best positioned to grab this opportunity of a life time and be able to determine the future of Blockchain in the Real Estate Industry. The provincial government of Ontario can invite the private sector to champion the initiative while ensuring that Real Estate bodies and Regulators play a constructive role in making it easier for the general public to benefit from a greatly simplified and far more efficient process of transacting real estate. The elected government owes it to its citizens.
