The traditional real estate industry has notoriously been known for being difficult and slow.
And while purchasing a home is one of the largest, major investments people might make during their lives, there has not been a lot of technological advances within the industry to streamline and expedite the process.
Real estate transactions are slow, cumbersome, and often require the middle-man of an escrow agent. Escrow is a procedure by which real estate is bought, sold, and refinanced (depending upon the state).
“Escrow is a service that protects the public and minimizes the potential risk involved in any real estate transaction. With an experienced neutral third party in possession of the legal documents and funds, which party is obligated to safeguard the instruments and funds, buyers and sellers, as well as lenders and borrowers, can safely interact with one another and be assured that no legal documents will be recorded, and no funds will be released, until all of the conditions of the real estate contract or agreement between the parties have been completed.”
Due to the slow and complicated process of real estate, blockchain tech companies have been looking to the blockchain to remove the middle man of the escrow service and streamline the financial verification element of the sales process itself. Removing the middle man removes human error and speeds up the process. A few tech real estate companies decided to pool their resources and put in the research to see how it could benefit their industry.
Blockchain-based Real Estate Projects
Ragnar A. Lifthrasir is the Founder and President of the International Blockchain Real Estate Association (IBREA) and has been advocating the blockchain tech for the real estate industry. Lifthrasir has joined together with a few blockchain-based real estate startups to push its implementation in the industry:
Flip, a company that uses the Bitcoin blockchain to allow users to buy and sell leases.
BrikShares utilizes the blockchain platform to build and fund real estate projects.
There are numerous other blockchain real estate startups out there, working on new solutions to title insurance, HOA governance, crowdfunding property investments, and smart contracts for commercial leases. Yet, more notably, are the blockchain real estate projects that are utilizing Ethereum.
Ethereum-based Real Estate Projects
REach, which is an incubator backed by the investment arm of the National Association of Realtors (NAR), accepted the startup Trust Stamp into their list of businesses. Trust Stamp uses the Ethereum blockchain and artificial intelligence to create an identity authentication system. By using an Ethereum contract which becomes unique to a user, and serves as their identity, Trust Stamp hashes the data to a user’s private key, which unlocks the information of their data. Users can provide the legal verification of their identity, their photo, name and any other verified data, which streamlines the identity process involved with real estate.
REX is a company that is the first decentralized real-estate platform built off the Ethereum protocol.
“It utilizes peer-to-peer technology and is built on the Ethereum protocol enabling cheap and reliable access. Unlike a traditional MLS, where your information is owned and controlled by one central agency, REX disseminates the information amongst peers thus preventing it from being deemed inaccessible to the author or end user.”
REX just finished their first successful seed round and objectives list, with plans to open up a second round. Over the next nine months, they plan to focus on a number of things: Token distribution, hiring and expanding their team, partnering with Dapps that explore identity systems and data distribution, updating the design on their platform to draw in mainstream users, and promoting their company through real estate conferences. They’re also looking for partnerships with brokerage, title, finance, and tech communities. Lastly, REX plans to host a community-based Token Swap late second quarter/early third quarter 2017.
However, REX isn’t the only company out there utilizing Ethereum for real estate needs. The Swedish National Land Survey, Lantmäteriet has tested a system for registering and recording land titles with the startup ChromaWay.
“ChromaWay are currently working on a Smart Contract Platform that allows for digitizing and representing workflows in a secure, private and efficient way. We take complex transactions and workflows and simplify them into code.”
In union with Lantmäteriet, and Kairos Future (an international research and management consulting firm), and Telia Company (the dominant telephone company in Sweden and Finland), ChromaWay plans to use smart contracts for the process of selling a house by using Ethereum to reduce the risk of manual errors, and create a more secure process for transferring important documents related to real estate and land registration.
Regis, by ConsenSys, is also another project using an Ethereum-based blockchain to create a decentralized registry platform. With Regis, they plan to dissolve fake land titles and registries since traditional private managements can potentially misuse registry details. Current online registries might make it easier for both the government and other authorities, due to the ability to update the registry- but it suffers when it comes to managing ownership and maintaining records. Regis focuses on transparency and security while still making registration easily accessible by those with an access key.
Many of these Ethereum-based real estate projects may still remain in their infancy, but they’re certainly working on new solutions for the industry. Whether these projects are in Alpha Mode, stealth mode, or still in a conceptual phase, you can be sure that the real estate market will soon be seeing a major technological makeover in the years to come.
ETHNews will follow the advance of all Ethereum startups. If you are involved in any Ethereum-based real estate projects, we’d like to hear from you. Please email media@ETHNews.com.