Redesigning the Brokerage Relationships with Agents and Consumers
This is the third blog post in a series of ten that covers the trends that will shape the residential real estate industry in 2019 and beyond according to the publication, Swanepoel Trends Report 2019. The views, thoughts, and opinions expressed in this post belong solely to the author, and not necessarily to the author’s employer or the publication cited.
If you’re like me, your eyes glaze over when someone tries to explain what Blockchain is. Most people that write about the topic are techno-geeks who are trying to impress you with their level of knowledge on the topic. Unfortunately, the average person gets lost in the Blockchain jargon about the second sentence into an article and they stop reading.
The average person’s understanding of Blockchain is illustrated perfectly in this comic:
Well here’s one of the reasons why you should want to pay attention and try to understand this concept and how it could effect the real estate business: forty of the top financial services companies have already invested over $1 Billion (yes – with a ‘B’) in Blockchain company infrastructure in the hopes of reducing costs in the future.
Let me try to explain Blockchain in simple terms to that you can understand it.
Blockchain is a unique method of recording specific details of a transaction in a chain or ledger and distributing it across a network of computers. Because each computer in the network has the identical information and is updated everytime someone adds something to the Blockchain, there is no need for one authority to certify the transaction because everyone in the chain has access to the same information.
Here’s my illustrated version of Blockchain for the average layperson:
Believe me, Blockchain is a lot more complicated than what I just described; however, now you know the basics.
Think of all the instances in a residential real estate transaction where data has to be verified. How about these for starters: deposit money, job verification, status of title, insurance coverage, buyers’ credit, identity of parties, property taxes, and the list goes on and on. Now imagine that all these items (and more) could be verified instantly – – – let that sink in.
When you add cryptocurrencies like Bitcoin to the equation where people could exchange products and services in a Blockchain using this token, the possibilities are mind-boggling.
The more I read and learn about this topic, the more I’m convinced that Swanepoel is a little early to the party on this trend. While some portions of our business will migrate toward simple Blockchains, I think we are years away (+/-10) from regularly working with it in residential real estate transactions.
Just think of all the industries that would have to agree to utilize and adopt Blockchain technology for us to see tangible results; title, mortgage, insurance, banking, brokerage, legal – – – and the ultimate wild card – – – the government. It’s going to take an act of God for all these players to agree to anything. It took years for TRID (the TILA-RESPA Integrated Disclousre rule) to get adopted in our industry and Blockchain has a lot more moving pieces.
Up Next: Trend 07: The Digital End-To-End Real Estate Transaction Dream; Closer than Ever, But Still Far Away.
SOURCE: Lesswing, Mark and Hagey, Paul. “Trend 8: Blockchain + Real Estate; Redesigning the Brokerage Relationships with Agents and Consumers.” Swanepoel Trends Report 2019, edited by Stefan Swanepoel, 14th Annual Edition, RealSure, Inc. and T3 Sixty, LLC, 2019, pp. 46-61.