This is a guest post by National Top 25 REALTOR® Jonathan Alpart of Fathom Realty from Dallas. He and his father, who has more than 35 years of experience in data systems, are the co-founders of TitleCoin, a Blockchain token integrated with local governments to convey title instantly and securely. This is the second of two posts that introduce Bitcoin and Blockchain technology and how it will disrupt the real estate industry.
Currently, blockchain is being used in healthcare to keep your medical data private yet sharable across all your healthcare providers, it's being used in supply chain for global manufacturing, it's being used by musicians who can affirm that their music is their own and that they can be paid by listeners and fans without the need for a third-party music store. Blockchain is across industries, and it's about to completely disrupt real estate.
Why Real Estate Agents Need to Know About Bitcoin
Real estate agents need to know about this coming wave because you'll either be surfing it or going undertow, and there's no in between.
No matter if you are an agent, a seller or a buyer, try and remember the last real estate closing you attended. What's the one thing that comes to mind? Paperwork, right? So much paperwork.
The local county needs the paperwork to record the change in the deed. The lender needs the paperwork to issue the loan through compliance with the government. The Realtors and their brokers need their paperwork to disperse commissions. The sellers and buyers need the paperwork to know that they sold/bought the property. And, finally, the title company needs the paperwork to keep everyone on the same page through this whole thing.
If you've bought or sold a house recently, you likely have signed some documents online. So, why still all the paperwork you have to sign at closing? It's because of authenticity and security. Everyone needs to know it's really you, and the data sent through the internet cannot be hacked.
How Blockchain and Bitcoin are Changing Real Estate
Blockchain is changing all that. Now, introduce Bitcoin, or something even more specialized, such as a PropertyCoin or our TitleCoin we are developing. Not only has the transaction nitty-gritty at closing been streamlined, but you can have funds from a buyer reach closing from around the world, instantly and completely securely. We already have the technology to issue smart contracts that can send funds and issue title through the Blockchain at the speed of light.
There is a dark side to Bitcoin and Blockchain technologies. Since many of the transactions are anonymous, especially amongst those who are highly skilled with computers, it may be difficult to comply with Know Your Customer laws that banks must follow when issuing mortgages, for example. It could be a criminal on the other side of your computer that exchanged illicit cash into Bitcoin that is now trying to buy your house.
As with all new technologies, we are kind of in a Wild West period right now, but as blockchain becomes integrated into our institutions and as our government and financial services start upgrading, soon we will be able to enjoy a level of ease, security and privacy buying or selling property that will transform markets and wealth.
What This Means for Homeowners
You can throw away all those wraps and ice packs for your sore wrists - signing documents is about to get a whole lot easier. Especially for homebuyers with financing, there can be literally hundreds of pages you need to sign at closing (why are we still doing this in 2017?). The reason is the government is in dire need of an upgrade to blockchain technology, which will save you on time, joint pain and tax dollars. Perhaps more important, the marketability of your title will get an upgrade as well.
What This Means for Real Estate Agents
Don’t worry; it’s great news. The transaction coordination portions of our job is going to get a lot more streamlined, allowing us to focus more on client-focused negotiation and professional mastery (I’m not trying to put myself out of a job). Title, contracts, loan documents, etc. will ultimately be able to zip back and forth between parties with the added faith that they are accurate, authentic, verified and secure.