Blockchain technology is having an impact on the way we do business in real estate in these three key ways:
1. MLS Property Data
At its core, blockchain is the ability to share databases and processes. This opens up promising opportunities to make real estate data, which is principal to the process of buying and selling homes, more centralized and accessible.
Every real estate transaction goes through the multiple listing services (MLS), which tracks what agents represent which clients, contracts, listing agreements, appraisals and more. However, the MLS is notoriously fragmented. The information is decentralized and restricted, making access difficult for people who are not real estate professionals. It’s often out-of-date as well, which hampers an agent’s ability to make comparisons and spot trends.
Blockchain technology can be used to overcome these barriers within the MLS. By providing a way to securely share data, the blockchain makes a shared, nationwide database possible, one that offers real-time access to property information straight from the source and enables a more holistic view. It also opens up more opportunities for collaboration among players in the real estate industry.
2. Title Records
Title records are another decentralized, challenging-to-access aspect of the real estate buying/selling process. Even in 2017, title information remains stored at the local level and is offline. With the blockchain, this is starting to change.
In 2016, Cook County, Illinois began the nation’s first to experiment with blockchain technology for transferring and tracking property titles. When someone buys a property they receive a digital token and the traditional paper deed. The accompanying documentation of the token transfer is used as proof of ownership. Eventually, tokens could become the standard and take the place of paper deeds altogether.
The third area of real estate that the blockchain will transform is the efficiency and the security of transactions. The blockchain does not require there to be trust between two parties to conduct business. Each user has a unique identity on the blockchain via cryptography, which means consumer financial information can be shared securely with other parties during transactions. One person can send funds to another person that won’t release until the transaction is formally completed.
This layer of security speeds up the transaction management process. Whether or not the buyer and seller are in the same place, property financing is sped up by the existence of a centralized financial record for each party.
Blockchain technology streamlines the real estate ecosystem by enabling people to securely and efficiently share data and money. It makes information more accessible, cuts out middlemen and reduces the risk of fraud and theft. A more secure, speedier, trusted process for buying and selling property is good for everyone involved.
Feel free to contact E-SPIN for Blockchain system and solution infrastructure availability, performance and security monitoring and testing.