Tokens Will Replace Title Policies
Issue 32 - May 14th, 2021
Blockchain technology will transform the title process for real estate transactions, but title companies won’t be entirely displaced. I am infatuated with the possibilities of the blockchain applications for the future real estate world, and I wanted to share some thoughts and ideas in today’s post. As with everything in the dinosaur real estate industry, these things will take time. The iteration and transformation of the title industry will play out in phases, and I think my idea outline below is just one of many ways this could develop over time:
Phase 1 - companies like Qualia and other software providers are making the current, title and escrow processes more efficient, and at the same time they are making title companies more profitable with technology. This shift is already happening today, and the pandemic pushed these technology tools even more mainstream allowing online closings to occur and other innovations that will stick around post-pandemic.
Phase 2 - county recording systems around the country will go completely digital and property records will become "tokens” instead of “paper” files. Blockchain technology companies will partner with counties in America to digitize their property records and “mint” property tokens that show chains of title ownership. Once data enters the blockchain, it updates in real time, and historical data cannot be deleted or modified. In order to “mint” a property token on the blockchain, there will be a standardized “minting” process to allow recording on the blockchain.
For example, a property “token” includes legal data about the property, including paperwork, disclosures, reports, surveys, image files, and even videos. The token would show who owns the property currently and historical information on the property that is legally allowed to be publicly displayed.
Phase 3 - when closing a transaction, title companies will access the blockchain and pull the property token to instantly get historical information of the property from the date it was minted on the blockchain. The title company will then verify accuracy before issuing a new “token” at a property closing with the updated information for that particular sale tied to that exact date and inputted into the blockchain.
Phase 4 - title insurance will evolve and become much cheaper over time as property “tokens” and blockchain minting becomes more widely accepted across the country. The blockchain technology companies could also partner with title insurance providers to eventually offer a “chain insurance policy” that will be far cheaper than title policies today. Again, breathe - this will take time to break down the barriers in place today.
Phase 5 - I will write about this in next week’s newsletter, but I believe “de-fi” will become HUGE in the home financing industry, and banks will have serious competition in the future for “mortgage” products. Once the “token” system is firmly in place in America for property records then the possibilities of innovating on the home finance piece of the transaction become wildly exciting.
Until next week, enjoy the weekend!
Newsworthy Links To Share
Austin, TX based AnthemIQ, a commercial real estate transaction platform that just launched in February 2021, has announced a $10 million Series A round to accelerate growth and product expansion. The platform provides one simple digital platform for commercial real estate brokers to manage the entire transaction process from search to signed lease. (PR Newswire)
Douglas Elliman launches impressive agent dashboard for their agents to run all pieces of their business in one place. They have integrated with other software providers like Rechat, Notarize, Docusign and VideoBolt directly into their updated agent dashboard . I like their approach of integrating with existing products that agents already love to use instead of trying to build every single item from scratch like other brokerages in the space attempt to do. (Inman)
Plunk, a mobile app that aids homeowners in making decisions to increase their home’s value, raised $6.5 million in seed funding. We want to empower homeowners to build wealth through their homes. To help you achieve your personal financial dreams, we equip you with expert information and guidance—rooted in high-level data science, trusted sources, and independent research. All designed to give you the tools you need to boost your home value and maximize your equity potential. (Plunk.com)
Lone Wolf Technologies has acquired two other real estate technology companies, LionDesk and HomeSpotter. With these acquisitions, Lone Wolf's end-to-end technology suite now encompasses digital marketing, lead generation, CRM, showing scheduling tools, comparative market analysis, digital forms and signatures, transaction management, back office and accounting, business insights, and recruiting. LionDesk is used by over 165,000 real estate professionals in the U.S, and HomeSpotter integrates with over 300 MLSs and reaches over 500,000 real estate agents across North America. (PR Newswire)
PROPERTY HIGHLIGHT: Striking, contemporary, warehouse-like residential property in the heart of Venice Beach near Los Angeles. The property seamlessly blends indoor and outdoor spaces, and the home itself resembles a piece of art. Listing price is $8,100,000.
Click link below for photos: Private, gated & green architectural masterpiece on a huge corner lot close to Abbot Kinney & the beach in one of Venice’s' most sought after neighborhoods (Milwood). An urban oasis with striking exteriors and industrial warehouse feel. Walls of glass open to several distinct outdoor experiences on all four sides with large-scale entertaining areas & plenty of room for a pool, including sunken courtyard, fireplace, 2 roof decks. This property also features the world’s first residential commission by renown anonymous French street artist, Invader. This unique architectural compound is a utopian sanctuary of art & life. (Zillow)