Buying a home is one of the biggest steps we can take in our lives, investing in our family, our quality of life, and our foreseeable future. Taking on this new financial and personal commitment, homeowners place a great deal of trust in the hands of real estate agents to fulfill their needs and to facilitate each step along the way. Although, it is unknown to many buyers that in this process, their own security is at stake. Providing social security numbers, bank statements and other private documents that are required for ownership, clients disseminate a great deal of personal information that could easily be taken advantage of. In this place of vulnerability, according to Annika Bansal, real estate agents uphold an essential responsibility, ensuring that all of their client’s information is protected and maintained in secure way. Luckily, an emerging technology is making it easier and easier to do so - the blockchain.

What Exactly is the Blockchain?

The blockchain is a new form of record keeping that is changing the ways in which we complete and verify transactions. It’s decentralized, meaning that records of information are distributed over multiple servers rather than one centralized server. This greatly reduces the risk of attack and the inherent problem that comes along with entrusting too much power to one entity. The records are also immutable so that no information can be altered (mitigating fraud), only updated in a new block. What’s more? All information is verified to be accurate through the rules set forth by all parties involved in transactions, known as ‘Smart Contracts.’ Blockchain technology is already improving record keeping in the healthcare, law, and even supply chain industries, and real estate is next.

The technology is so disruptive, that many people believe that there will be no need for real estate agents in the future. But, not to worry, real estate agents are here to stay, empowering human connection in the ever-emotional process of buying a home. According to Ragnar Lifthrasir, Founder of velox.re, one of the first companies to convey title on the blockchain, “Agents will not go away, but their roles will change.” Real estate agents will start to resemble project managers and begin to carry out their clicents’ needs in different and more efficient ways.  

Here are the five ways Blockchain technology will transform the Real Estate industry, according to Piper Moretti, President, Crypto Reality Group, and a leader in the revolutionary space:

1. Smart contracts. You know the mountain of paperwork and disclosures that agents must keep track of to close? 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.

2. Transparency. All parties involved in the transaction including the buyers and sellers, their respective agents, vendors (inspection, termite, etc.), escrow officers, title reps, lenders, and so forth, will be able to log on to see exactly which part of the process is being executed at any given time. Each step cannot be unlocked unless the previous step is completed using the smart contracts mentioned above.

3. Title Fraud Mitigation and Conveyance. Everything we know about a particular property will be recorded and distributed among parties for much easier access and readability, and we’ve already proven we can convey title on the blockchain. The only caveat is the unknown, meaning that blockchain technology won’t be able to verify some distant relative showing up one day laying claim to a house, much like today’s methods of record keeping. But since the information on the blockchain is immutable, title fraud will be much less common.

4. Verification. How exciting would it be to have your buyers prequalified before they even call you to view properties? Future clients will be able to run their finances through the prequalification process with their lenders much faster and be assigned a hash number we’ll then be able to reference and verify that they’re good to go.

5. Payment Gateways. Yep, your buyers will be able to pay for a property using Bitcoin, Ethereum and other accepted altcoins, or with traditional payment methods through secured payment portals. Escrow fees, taxes, and any other associated fees can be settled on the blockchain as well.