Blockchain technology has the potential to change the real estate transaction. It also faces significant hurdles to widespread adoption.
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To its staunchest supporters, blockchain technology appears tailor-made for revolutionizing the home transaction process.
This technology’s ability to create unique ownership tokens for physical and digital assets holds tantalizing prospects for real estate, Lane Hornung told an audience of real estate professionals at Inman Connect New York. But this same technology is also a long way off from widespread adoption in the areas of title and brokerage services, he said.
“There’s about 10,000 county clerks out there that have to go along with the party,” Hornung said of the slow-moving nature of the title process. “They have to switch over their systems to blockchain. I’m not holding my breath for that, and I own a title company.”
Still, Hornung, the CEO of zavvie and 8z Real Estate, is a big believer in where this technology is heading.
His companies already connect consumers to similar New Age resources. And he encourages his teams to dabble in metaverse land sales, if that’s an area they’re interested in.
This sales category — where digital plots of land change hands within entirely virtual worlds — still amounts to a tiny fraction of global real estate sales volume. There’s just too much revenue in the real world that an all-metaverse agent would be passing up on, he said.
“As a broker-owner, … am I gonna throw all that out and become a metaverse-only shop? No,” Hornung said. “But am I going to support agents in my company that become metaverse specialists? Absolutely.”
Hornung likened a metaverse specialist to an agent who conducts normal transactions while occasionally assisting with sales in golf course communities or equestrian properties. Their expertise would make them stand out among other agents with a particular clientele.
But an area where blockchain technology could lead to a host of new products in the near- to mid-term future is home-financing alternatives, Hornung said.
The unique ownership tokens and smart contracts made possible by crypto technology might present opportunities for a more decentralized — and the hope is, more accessible — financing infrastructure supporting the home transaction, he said.
How are they going to do this, exactly? These so-called “de-fi” companies are still in the very early stages of figuring that out.
Companies like Milo are already starting to offer crypto mortgages. Other applications of smart-contract technology are promising as well, Hornung said. These smart contracts allow automated, multistep processes to occur once specific conditions are met.
For Hornung, the de-fi movement in the blockchain community is the natural heir to an ongoing shift toward Power Buyers and others who are re-envisioning the home-financing process.
“At my company, zavvie, we have this front-row seat at what’s happening,” Hornung said. “And it’s pretty cool because this is the first wave, but there’s another wave coming.”