Archive for June 25th, 2021
Blockchain and how it’s changing the future of Real Estate
Tuned in to an interesting webinar this week hosted by Dan Smith with Eric Bryant from First American Data & Analytics; they were talking about real estate on the blockchain. Personally I can’t wait for this to happen, I spend half my life ‘grown up babysitting’ to maintain timelines and accountability during the escrow process. I know the blockchain will eliminate quite a bit of that.
Fibree is one of the first adopters, and they are now in 70 regions. They are a real estate technology platform that works with blockchain – keep an eye on them. Rather than talking about too many companies…let’s talk concept first.
What is Blockchain, and how does it affect real estate?
Blockchain defined: Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.
https://www.ibm.com/topics/what-is-blockchain
Now that you understand what blockchain is, here are a few specific ways it can positively affect the real estate industry as a whole:
- Decreases time necessary to close property transactions (from 30-45 days down to possibly just minutes or hours)
- Offers security, trust, and transparency to the transaction
- Creates an unhackable public record
- Reduces potential for real estate fraud or data entry errors
- Streamlines the escrow process
- Upholds accountability
Question? Will real estate transactions on the blockchain eliminate escrow agents? Transaction coordinators?
Notice we say “how does blockchain”, not “how can blockchain” affect the space. Blockchain is already starting integrations with real estate transactions, and it is likely the future of our industry, similar to the way the Internet disrupted the status quo (in a good way) many moons ago.
Fractional Property ownerships and Tokenization using Blockchain
Tokenization is simply digital fractionalization – it allows you to own a piece of something. Ever wanted to own a piece of a property? Or maybe you already own a traditional timeshare. Bet that was fun to buy, LOL. But what about finding your next investment from the comfort of your own home? RealT based in Detroit is currently selling real estate on the blockchain, and there are many others in the space expected to follow.
Investor groups and investment firms are already successfully selling STO (Secure Token Offering) properties and this opens doors for thousands of new buyers to enter into investing. Want to see? Check out SolidBlock – it looks like any normal property search site…BUT… you can pay with wire, check, or crypto. Soon enough, property search platforms like this will be popping up all over the world.
Another place you can buy land, the entire plot of it, is Fabrica, which allows you to buy or sell your land completely digitally with blockchain technology.
Smart Contracts and Real Estate Transactions
Smart contracts are digital transactions being coordinated on the blockchain, and they will help maintain timelines and accountability. Smart contracts are very similar to paper contracts, working on ‘if –> then’ scenarios, but everything is done virtually instead of with paper. Smart contracts have a higher level of security and they always report and record progress honestly…which does NOT happen all the time with our current escrow process.
One thing I found interesting is our local board of Realtors has over 10,000 members, and there were less than 50 of us watching this webinar. As usual, it seems like the real estate industry tends to cling to their ways. As a techie, I embrace new technology and try to help my clients ride the wave.
Crypto loans – Something to keep an eye on
One thing that could completely change the mortgage space is cryptocurrency loans. Wallets like Celsius and others use actual data to digitally approve loans, much better than the ‘preapprovals’ that lenders offer today. I would personally love to see more of this, because it eliminates loan discrimination and assures the seller a buyer is qualified. Plus, a crypto loan will close much quicker than the traditional big banks. Less headaches will equal more people in the space, and more homeowners, which makes my heart smile to think about.
If you’re sitting on a pile of crypto from the bull run and would like to ‘take profits’, we can help with escrow companies who are familiar with cryptocurrency closings. If you’d like to cash out crypto to buy a home, OR just transfer crypto coins for a home purchase without cashing out first, we can help with the proper referrals or team. Feel free to reach out and text Angie at 949-338-7408 or comment here anytime you’d like to talk tech & real estate!
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