The real estate industry is rapidly adopting blockchain technology as seen with the latest purchase of a $1.6 million USD mansion in San Francisco. The property owned by Michael Arrington co-founder of the venture capital fund CrunchFund, was sold by Propy, a blockchain real estate solutions firm, becoming one of the largest sales by the company so far.
The State of Real Estate And Blockchain Technology
Speaking on the challenges the field of real estate faces, Arrington complained on the complex nature of transactions happening across the property market, which makes the process of buying real estate “arduous and broken”.
Blockchains aim at simplifying the process of buying real estate by providing an efficient, clear, cheap and decentralized way of buying and selling property. The long waits at property authorities have become “opaque, dated, and unnecessarily lengthy process” with increased risks of fraud and scams.
Michael Arrington (Source: Shutterstock)
Unlike the legacy systems of purchasing a property, Propy offers a blockchain platform for buyers, sellers, agents and regulators to carry out the whole transaction online. This saves time, costs and makes the process easier for investors to take up real estate. Once the deal is complete, the transaction details are recorded on a blockchain which provides finality of the deal.
The CEO of Propy, Natalia Karayaneva believes blockchain technology can offer a solution to the real estate industry problems given its supreme qualities. Natalia said,
“When it comes to expensive property or other expensive goods, these normally already have digital presentation of ownership, that’s why blockchain is applicable to [the real estate] space. Blockchain’s main implications, after [virtual] money, is as a technology that enables ownership transfers… it aligns the entire process of any value transfer including real estate.”
The CEO was however uncompromising on whether Propy will end up taking up the responsibility of county governments in issuing a record of title deeds in the real estate industry saying,
“We don’t want to work against them. Either we help them or will eliminate them.”
Propy, The blockchain Real Estate Platform
The sale of CrunchFund mansion on the Propy follows the sale of a duplex in San Francisco for $2.4 million USD, which is the highest sale yet by the company. The company has enabled over 60 real estate properties to be sold on the blockchain platform since its opening back in 2017, with the median price of a mansion at $1.5 million USD. The blockchain real estate company has made quite a number of noticeable sales from its first mansion in Vermont in June 2018 to a 17th century Italian mansion and UNESCO site.
The rise of blockchain in the real estate market is truly remarkable looking at the response Propy has gotten from the market so far. The company has already completed sales for over 20 realtors with over 3000 participants having signed up to the platform.
Earlier in the weekend, reports from Malta confirmed that the Prime Minister, Joseph Muscat is looking forward to place every rental contract including title deeds on blockchains. This is aimed at improving the tax collection systems from realtors, enhancing the record keeping in the industry and promoting economic growth across the Mediterranean country.