Real estate transactions traditionally involved a combination of labor-intensive processes that must be repeated over and over again, regardless of inefficiency. Nowadays, blockchain platforms like Propy have enabled specific real estate transaction processes to be automated with smart contracts (coded functions that automatically perform the paper-pushing jobs that used to be given to human agents).
Over the next decade, automation will reduce property transaction friction at multiple points, reducing time and costs and making it much easier to buy or sell properties from across the globe. Let us take a closer look at how blockchain tech will help to accomplish these goals.
How Blockchain Automates Escrow
Escrow companies have traditionally operated between the buyer and the seller, holding the money until the handoff of the deed and the money is finally ready to be initiated. With blockchain tech, smart contracts can perform the Escrow function.
Through the public ledger of the blockchain and the immutable, hackproof nature of the technology, payment can be stored on the blockchain for all to see, no independent Escrow company required. Furthermore, deeds and other essential documents can be recorded on the blockchain. When all transaction participants perform their necessary tasks on a platform like Propy, smart contracts are engaged, releasing the money and the deed to the proper recipients. No human agents are required to perform this specific function.
Automation Will Simplify Other Paper-Heavy Processes
Past homebuyers know just how paper-heavy the traditional real estate transaction process is. Pages of paper are exchanged across desks during the closing process, with signatures applied painstakingly to each page. With new tech, smart contracts will become the norm for real estate transactions, making homebuying much less labor-intensive for all parties.
Over the next decade, it will become commonplace for properties to be bought and sold in less than a day with blockchain-based applications like Propy. We have already seen Propy perform this role with Michael Arrington’s property acquisition in Ukraine in 2017. Over the coming decade, this type of transaction could very possibly become the rule, not the exception.