Many are banking on blockchain technology to one day transform the business of real estate by moving all aspects of transactions to a digital platform, making them faster, less costly, and more resilient against fraud, a panel of experts said during the 2017 REALTORS® Conference & Expo on Friday.
“This new technology will enable a major disruption in all aspects of business,” Jessica Stoner, host of The Future of Real Estate radio show, said during a session called “Might the Future of Real Estate Include Blockchain?” “Many of us may not know what blockchain means fully, but at the very least, we need to understand the basics of what it is and how it might be used in the real estate industry.”
What it is: Blockchain is essentially software that was first developed as a way to securely store digital currency, such as Bitcoin. But its storage capabilities have evolved. With blockchain, no one entity is in control of information; instead, it’s accessible by multiple entities, offering greater ways to verify information and leave a digital trail to help combat fraud. Blockchain will create a better system for recording and providing access to information in real time, said Avi Spielman, founder of Joon Properties, who also has written about the evolution of blockchain technology in real estate. “Blockchain enables greater universal access so everyone can work from the same information in a much faster, easier, secure, and fluid way,” Spielman said.
The potential benefits: It’ll help real estate professionals avoid having to enter data multiple times in multiple places. That also mitigates the potential for human error or data discrepancy, Spielman said.
Currently, real estate information is so decentralized that it often requires visits to multiple offices to get a complete picture of a property’s history, said John Mirkovic, deputy recorder of deeds for Cook County, Ill. Mirkovic, who has helped launch the Illinois Blockchain Initiative, an effort to explore blockchain’s impact on government, said blockchain will unify the transactional data and make information instantly recordable and accessible. “It’s a way to improve real estate, making closings faster. There will be less back and forth at the closing table.”
It could make international transactions more transparent and seamless by standardizing information globally, and could also foster an era of the “smart contract”—an automated real estate agreement—Mirkovic said. “Imagine everyone can sign off and have the contract notarized, even while they’re at the beach if they wanted to,” he said. “The transaction becomes very simple, like the snap of the fingers. You and the recorder are in the office at settlement for not hours but just 30 minutes, and the transaction is done for $1,000 less, too.”
What will hold it back: Educating the community will be key, Spielman said. More groups, including municipalities, consumers, technology service providers, and app developers, need to buy into the idea of using blockchain. “Many in the industry may be allergic to change, especially when it has to do with technology,” Spielman said. “Getting people up to speed that it isn’t this big, new, scary thing, I believe, is the biggest hurdle. This has the potential of moving prices down. This could mean a push of a button, and you get a title report back.”
Some entities may fear blockchain will strip away jobs by consolidating information. “There’s a lot of fear, uncertainty, and doubt surrounding blockchain,” acknowledged Nathan Wosnack with Ubiquity LLC, a firm that is touted as the first blockchain-secured platform specifically for real estate recordkeeping. But the panelists said it will make jobs easier. Blockchain will allow users to call up real estate information from a web browser rather than having to log onto multiple systems, Wosnack said.
Further, “you don’t need to know how it works or be able to understand the code to utilize its benefits,” Spielman said. “Blockchain is a protocol. All you need to know is that it’s safe, and it won’t put you out of a job. It’ll just be operating in the background. … I think it’s unbelievable the power this technology has to change real estate transactions.”