As a real estate professional, you rely on title companies to facilitate safe and secure transactions. But what if third party verification wasn’t necessary? What if a secure public ledger could verify transactions instantly and without fees? Blockchain technology may just make this a reality.
What is Blockchain Technology?
Blockchain technology is the backbone of Bitcoin, a digital currency created in 2009, that has no physical properties and exists in an online public balance sheet. A blockchain is a ledger of all transactions that have ever happened. The chain is made up of blocks that are added to the ledger in a chronological order, and each block is composed of the most recent transactions. Because the blockchain is publicly maintained and constantly growing, the transaction ledger is constantly copied and verified across countless devices, making it virtually impossible for a single individual to alter the ledger.
What’s this got to do with real estate? Well, if you can sign a contract digitally, stage a home without any real furniture, and view it through a virtual reality headset, why can’t property records or a person’s full financial records be maintained digitally through blockchains in the same way?
Using Blockchain Technology in Real Estate
Imagine being able to access the full financial and ownership history of a property with the click of a few keys. A lot of the time consuming work of real estate could be eliminated with a tamper-proof digital record.
Part of the job of a title or escrow company is to verify ownership, discover unknown liens, and make sure a property can legally be transferred to a new owner without causing any unpleasant surprises later. Blockchain technology could give you that information instantly – instead of the days or weeks it can take to get it from a title company – at no cost. Sellers could transfer ownership to buyers quicker and verification information would be accessible on demand.
The beauty of blockchain technology is that the information is always current, complete, and accurate. The internet has brought us many wonderful things like easy property search, video showings, and all the cat videos we can stand. But it’s also allowed fraud to be as easy as copy, paste, and print. Blockchain technology addresses this technological pitfall, making fraudulent transactions highly unlikely.
More Information, Quicker
A lot of information has to be shared in the home buying and selling process. Buyer’s financial records have to be verified. The condition of the home needs to be checked. Disclosures have to be completed by sellers. Liens and prior ownership has to be ferreted out. With blockchain technology, a buyer’s information could be easily made available to the lender. The maintenance, repair, and financial information about a home could easily be provided to the buyer and their agent. And it would all happen digitally in real-time. Underwriting, title search, home inspections, and all the information needed to complete a transaction could be shared and viewed faster than ever before.
Blockchain technology is probably years away from going mainstream, and compiling the information on buyers, sellers, and real estate won’t be a quick process. But Blockchain technology is almost certainly going to play a large role in future real estate transactions.