• Piper Moretti

How Blockchain will Change the Face of Real Estate

I’ve blogged on blockchain the before. I speak all over the county on the topic. At the last speaking engagement, I looked out over the audience and saw the interested but confused faces and I realized there are far more agents out there that are still having a difficult time grasping the concept. Hopefully this article can help you as a real estate professional understand blockchain and how it will help, not hinder, our profession.


What Blockchain IS

Refresher: Blockchain is a public, decentralized, immutable, transparent, verifiable, distributed ledger.


Okay, fabulous. Just WHAT DOES THAT MEAN??

It means that this new form of record keeping is out there in the world for anyone who would like to verify a transaction. It’s decentralized, which means the records are distributed over several servers rather than a centralized server, greatly cutting down the risk of attacks. The records are immutable, which means no information can be altered (mitigating fraud), only updated in a new block. All the information is verified to be accurate through the rules set forth by the parties involved in the transactions. The blocks of the transaction are held together by a string of hash numbers, each one referencing the last block, hence “blockchain.”


Nodes are the interfaces of the blockchain, so to speak. You don’t need to be a computer geek and you don’t need to know code. Think of a Google doc or shared files in Dropbox: Most of us can’t even begin to imagine the innerworkings of Google’s code, but we trust that when we need a document, it will be there with all the updated information. Blockchain technology is already improving record keeping in the healthcare, law, and even supply chain industries, and real estate is next.


What Blockchain Technology Will Do for Real Estate


Alright, so you *kind-of* have a working knowledge, but how will this affect our industry?

1. Smart contracts. Remember the “rules” I was referring to? And you know the mountain of paperwork and disclosures that agents must keep track of to close? We’ll be able to program the rules of each property transaction including disclosures, contingency periods, loan information and escrow instructions, drastically cutting down the time and energy it takes to gather the information and generate the documents.

2. Transparency. All parties involved in the transaction including the buyers and sellers, their respective agents, vendors (inspection, termite, etc.), escrow officers, title reps, lenders, and so forth, will be able to log on to see exactly which part of the process is being executed at any given time. Each step cannot be unlocked unless the previous step is completed using the smart contracts mentioned above.

3. Title Fraud Mitigation and Conveyance. Everything we know about a particular property will be recorded and distributed among parties for much easier access and readability, and we’ve already proven we can convey title on the blockchain. The only caveat is the unknown, meaning that blockchain technology won’t be able to verify some distant relative showing up one day laying claim to a house, much like today’s methods of record keeping. But since the information on the blockchain is immutable, title fraud will be much less common.

4. Verification. How exciting would it be to have your buyers prequalified before they even call you to view properties? Future clients will be able to run their finances through the prequalification process with their lenders much faster and be assigned a hash number we’ll then be able to reference and verify that they’re good to go.

5. Payment Gateways. Yep, your buyers will be able to pay for a property using Bitcoin, Ethereum and other accepted altcoins, or with traditional payment methods through secured payment portals. Escrow fees, taxes, and any other associated fees can be settled on the blockchain as well.

6. Faster Loan Process. Since buyers’ financials will be recorded and verifiable, actual loan processes can take as little as 48 hours. Blockchain technology will be able to match clients with lenders according to their specific needs and requirements.


We as agents still have a fiduciary duty to our clients to keep their sensitive information safe and secure. We can choose what information gets disseminated on the blockchain; social security numbers, bank statements and other private documents can be referenced with another hash number, letting the trusted user know where the physical information is stored. Each party involved in the transaction will have their own level of security depending on their role.


I’m also asked all the time about disintermediation. To quote yet again my highly respected colleague, Ragnar Lifthrasir, Founder of velox.re, one of the first companies to convey title on the blockchain, “Agents will not go away, but their roles will change.” We will become more like project managers, but I also think there will still be a need for the human element as homebuying is and will always be an emotional process.

Blockchain tech isn’t perfect, but it beats the current system and we still have a way to go. We’re still about 2-5 years out from widespread adoption, but we’re slowly but surely getting there. Arizona, Delaware and Wyoming have already recognized blockchain as a legal form of record keeping, and California isn’t too far behind.



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