Fundamentally, blockchain is a technology that will ensure that data is transparent, verified, and unalterable. This ability carries major implications for real estate professionals:
Drastically Reduced Timelines: Think about all the time that’s currently spent on underwriting, due diligence, title work, and, ultimately, signing a contract. Each of these processes is individually time-consuming because the data at hand must be manually reviewed and confirmed. CRE professionals depend on information (property title, operating statements, etc.) that come from a variety of sources. Blockchain technology will be used to aggregate and store critical property information that can easily prove that other data — used underwriting and due diligence, for example — is true. For a broker, this will cut traditional transaction timelines dramatically.
A Reliable MLS(Multiple Listing Service): One of the core challenges for brokers today is finding property information that is both complete and up-to-date. Most databases are proprietary and somewhat unreliable because the data is cultivated manually and stored across different providers in different formats. A blockchain, on the other hand, can function as a comprehensive ledger that is updated by confirmed transactions, with the ability to house critical information including property records, capital values, ownership history, tenant details, age of the property, and title. A blockchain-enabled MLS provides a broker and the market with more transparency, since all transactional information will be updated publicly and in real time.
Trusted Identities: Today, real estate professionals confirm the identity of their counterparties with one reliable tool: their eyes. That’s because deals are inked in-person with pen and paper. However, what if there was a way to execute a deal with the click of a mouse, while still knowing with certainty that your deal partner is who they say they are? That’s what a blockchain will do, thanks to its ability to create a unique digital signature for each participant, with the ability to see transaction history to gauge reputation. This will break down geographical barriers, and remove friction from the transaction process.
Real estate is, at its core, a people-centric, relationship-driven industry. However, as has become clear in recent years, technology can enhance the deal process. Technology can help to automate the science of a transaction, but still empower the broker, principal and tenant in the art of deal making.
As the industry inevitably inches toward storing its data on a blockchain, it would be wrong to think of it as an elite and complex technology. (In fact, you might not need to think much about the underlying technology behind it at all.) Instead, look forward when the blockchain can make the transaction process more straightforward, efficient and secure for all CRE professionals.