Navigating the complex technical components and emerging market dynamics of blockchain technology and cryptocurrencies can be a daunting task. Blockchain technology has peaked the interest of professionals across a variety of industries, with many looking for ways to enter the space. One of the sectors that blockchain tech is pegged to have a substantial impact is real estate, both commercial and private.
Blockchains have the potential to increase efficiencies in real estate processes in everything from improving property title management to enabling efficient processing of payments and financing. Eventual tokenization of real estate derivatives such as REITs can even significantly reduce transaction costs involved in real estate investment.
Despite the vast potential of blockchains and cryptocurrencies to disrupt the real estate market, there are still major barriers for many brokers, agents, and prospective buyers/sellers to enter the industry. The primary obstacle is education on how the technology works and how it can be successfully integrated into businesses and real estate transactions.
According to a report by Deloitte, education about blockchains is one of the primary focus areas that companies and professionals need to emphasize to foster further adoption of the technology. There are numerous resources available online for learning more about cryptocurrencies and blockchains; however, the content is mostly tailored towards developers and analysts already familiar with the underlying fields of cryptography, economics, and computer science.
Crypto x Real Estate — a course founded by Piper Moretti — is striving to bridge the gap between blockchains and real estate by providing education, escrow, and consulting services for real estate professionals on the industry’s intersection with blockchain.
Applications of Blockchain in Real-Estate
There are several profound applications of blockchains that offer a much more transparent and efficient model than existing systems in the industry:
- Land Registry and Property Title Management
- Faster, Efficient, and More Secure Financing and Payments
- Smart Contract Property Management
The real estate industry is highly fragmented across the globe, leading to disparate land registry formats and costly processes for investigating property ownership. This is particularly problematic in developing countries, where land records are poorly maintained and often never made transparent.
Blockchains exist as decentralized ledgers secured by cryptography and consensus among thousands of nodes in the network. Public blockchains such as Bitcoin and Ethereum are thus afforded immutability as permanent records of transactions and other data stored on their systems in a universally accessible interface. The UN has already researched integrating blockchains in the land registry in India to improve efficiency and auditability of properties in the country. Further, Sweden is in the process of implementing a blockchain-based land registry system, projected to save taxpayers millions of dollars in costs associated with the traditional method.
Blockchains — specifically cryptocurrencies — can also have a meaningful and lasting impact on how payments and financing are processed in real estate transactions. Bitcoin provides almost immediate finality to transactions that are censorship resistant and entirely peer-to-peer. As a result, intermediaries are removed from the process, significantly reducing fees and improving processing times. According to a report by Deloitte, paperwork for financial execution of commercial real estate transactions is often the primary culprit in prolonging the nearly 3-month long process.
Payments such as financing or leasing can also be automated through leveraging smart contracts, automated agreements that execute on the blockchain when certain conditions are met. In the context of a private real estate sale, smart contracts can automate everything from mortgage payments to legal documents, improving transparency and streamlining the process.
Smart contracts can also enhance property management processes such as rental agreements, due diligence on potential buyers/sellers, and reducing costs associated with trust.
The benefits of the intersection of blockchains and real estate are clear, but the hurdle remains. The barrier to entry is high, and many real estate professionals do not know how to dive into the technology. That’s where Piper Moretti’s Crypto x Real Estate comes in, to help educate and guide real estate professionals about blockchains and cryptocurrencies.
Crypto x Real Estate and Onboarding Industry Professionals
Piper Moretti is an experienced real estate agent in Southern California who was the first agent to sell over 5 multi-million dollar properties for Bitcoin. She saw the opportunity that cryptocurrencies provided in simplifying the real estate process and decided to start Crypto x Real Estate, a real estate education and consulting company focusing on blockchains and cryptocurrency.
There have been countless examples of people recently buying luxury items with Bitcoin from cars to yachts. Using Bitcoin to purchase homes will likely become a standard transaction as both the technology and the real estate industry progress. Buying or selling a home in Bitcoin is essentially the same as a cash settlement, only faster and more secure.
Moretti experienced this convenience with her first Bitcoin real estate sale and has since moved on to participate in projects such as Block66 for blockchain-based mortgage lending and CPROP for transparent real estate data. Crypto x Real Estate offers a comprehensive course on guiding real estate agents through cryptocurrency payments as well as walk through guides and consulting for businesses.
The consequences of blockchains, cryptocurrency, and real estate integration involve everything from tax implications to evolved escrow processes. For many real estate professionals, little options are available to access the necessary information to take advantage of the emerging technology. With the intersection of blockchains and real estate poised to disrupt the entire industry, initiatives like Moretti’s and her Crypto x Real Estate company are helping to bridge the gap between the two.