Blockchain is the next frontier of the real estate market, making inroads at a fast clip. The use of the technology will make it possible to have transparent transactions that sellers and buyers will benefit from. From real-time ledgers to full-on shared databases and processes, blockchain throws the doors wide open with possibilities in real estate. However, does it come at a cost?
Some agents think it might, while others are embracing it with abandon. Yet, there is much to learn and consider before adopting blockchain into your business processes.
Nine members of Forbes Real Estate Council share the thing that everyone in their profession needs to know in order to safely and efficiently begin adopting blockchain or the tools it enables. Here is what they had to say:
1. Technology Will Enhance Security And Transparency
Although a lot of the commentary around blockchain and cryptocurrency red-flags security concerns, the truth is, blockchain is going to allow for added security and transparency that commercial real estate has never seen. The best approach to adopting blockchain practices is to find companies that offer solutions that are relevant to you. Don’t gamble on something you don’t understand. - Joshua Fraser, Data Nerds
2. Blockchain Will Disrupt The Real Estate Title Industry
What if you could irrefutably determine who previously owned a property, record with absolute certainty who the new owner is after it sells and reference the blockchain at any time to verify all previous owners? Even the combination or splitting of parcels would be easy to record with blockchain technology, which is not the case with the PIN system. - Marc Rutzen, Enodo Inc
3. Relevant Information Is Available On Specific Sites
Blockchain is mysterious and risky to many people who associate it with volatile cryptocurrencies. There are companies and professionals who have already conducted real estate transactions on blockchain platforms. If you don’t know title or mortgage companies or real estate agents who have experience or are willing to learn about blockchain, reach out to those who do. - Brion Crum, Caliber:The Wealth Development Company
4. Education And State Approval Will Help Adoption
Blockchain will absolutely change the way we conduct real estate transactions, with a way to record titles and pay for purchases with ease and fairly quickly. I think we have a long way to go on regulating what exactly makes blockchain legal. Once we establish a governing body to oversee the legalities, then we have to educate real estate agents and have each state’s real estate organizations endorse blockchain as well. - Angela Yaun, Day Realty Group
5. Blockchain Will Form A Secondary Market
The most interesting part about blockchain in real estate investing is the secondary market that will form. It will ultimately bring together a network of real estate sponsors into an organized and efficient marketplace. This new marketplace will allow sponsors to raise capital more efficiently going forward, which should open up more opportunity for new investment dollars to enter the space. - Sean Lyons, Triad Real Estate Partners, LLC
6. Blockchain Should Be Integrated Into Entire Value Chain
Without a doubt, blockchain and future shared-ledger platforms are the biggest global real estate disruptors of the century. From crowdfunding and digitizing property investment, to standardizing real estate transactions and practices, seek out opportunities to integrate and coordinate blockchain across your professional value-chain through the scope and scalability of your specific expertise. - Garratt Hasenstab, The Mountain Life Companies™
7. Adoption Starts With Learning, Adaptability And Application
To say there’s one thing to know about blockchain is like saying you only need to know one thing about the internet to utilize it. Like the internet though, you can start learning, get educated, and adapt to this evolving technology. Instead of ignoring it, get involved and influence the application of blockchain technology in your industry. - Dave Zirnhelt,Snap Up Real Estate
8. Blockchain Will Reshape How Data Is Exchanged
Blockchain is a transformative technology that can reshape how data is exchanged, transactions are conducted and value is created. It has the potential to transform most industries and can pave a bright future of innovation. One example in real estate that is ripe for blockchain is the title industry. Bringing title records onto the blockchain can streamline access and completely transform the process. - Matthew Murphy, Renren, Inc.
9. Blockchain Is Not Cryptocurrency
Our company is researching blockchain technology. The one thing professionals need to understand is the difference between the blockchain and cryptocurrency. The blockchain is a public ledger. It will give us the opportunity to improve the home title process and perhaps even eliminate title insurance. Cryptocurrencies are based on blockchain and highly speculative. - Jeremy Brandt, We Buy Houses®