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Real Estate on the Blockchain

By
Real Estate Agent with Coldwell Banker Select

Yes, Propy is a Crypto Project that is putting real estate transactions on the blockchain. It's up 18.5% today, 659% for the year, or more than the best performing stock in the SP 500 this year.

This is not financial advice, I just want to lay out the prospects for why this may be a good idea, some things I'm concerned about and just generally introduce the topic if you were not aware of it.

I have always considered Title Fees/Insurance to be expensive and thought that there must be a better way to do this.

A Blockchain records all transactions so could be a good way to record Title Transfers and simplify the process. It appears that you can record a property as an NFT (non fungible token) think of it as a registered unique digital item. In other words, a work of art is non-fungible, it is unique, a dollar bill is fungible, one dollar is the same as another.

Propy is a project and token that is in the Category of RWA (real world asset), it is an attempt to tokenize real world assets. Part of the allure of cryptocurrency is that it is trustless, you don't have to rely on the counterparty to perform. In the case of Propy, you are still relying on other people. It is inherently problematic and has been done before. If you watched the movie "The Big Short" or read the book, CDOs were basically mortgages that were separated from the house, pooled together and divided into tranches by risk. If a pension fund were buying CDOs and asked to see what the collateral is, the hedge fund would not be able to show it to them. You always want to know what your collateral is.

So recording transfers and fees paid on the blockchain it seems like could work and be a good idea. Evaluating the value of a home, upgrades, required repairs, the market in general and trends would be subjective and very difficult to record accurately on the blockchain. An appraiser could make an assessment and record it on the blockchain, it's not very different from the way that it's done now. The idea that technology and quants can assign values better than real estate agents has thus far proven incorrect, take Opendoor, they have never made a profit and lost $1.4 billion dollars in 2022 as a VC company that basically uses an algorithm to assign value to houses and does flips.

However, the world moves forward and technology will play a part. It will be interesting to see how the Project solves problems and makes the real estate transaction faster, more accurate and cheaper. I think it's important to keep an open mind to new things and keep track of them. Propy is already active in some states, I would be curious to hear if anyone has experience with them.

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