Real-estate is a very heavily paper-reliant industry. Deeds must change hands countless times before a property is settled, sometimes, larger properties are sold around between multiple firms. Propy, a blockchain-based real estate startup has announced a partnership with the State of Vermont for a pilot program. This will mark their second government pilot.
Propy partnered with the Ukraine in late 2017 for a real estate pilot. Vermont announced a law in 2015 that would allow the state government to utilize blockchain for recordkeeping and other administrative tasks. This law formed the basis for the Propy partnership, because without the clarity, Propy may not have had the opportunity to approach the state about the program.
Natalia Karayaneva, CEO of Propy offered the following insight into the program:
The Propy pilot will showcase the savings of blockchain distributed technology— furthering Vermont's and the City of South Burlington's goal to achieve more cost-effective government. In parallel to making land record management systems significantly more efficient, Propy's additional safeguards ensure additional data integrity.
How can blockchain impact real estate?
Blockchain is poised to remove much of the work between selling property and buying it. Insurers, agents, escrows, and many more individuals are involved in most transactions within the industry. Blockchain helps to remove the need for so many third-parties to be involved for one transaction to occur.
Costs are often so high because all of the work between buying and selling tends to be expensive, involving trust, reputation, and risk. Blockchain allows users to transact directly between each other with reduced risk of chargeback, fraud, or other concerns in the industry.
How does the state benefit from real estate on the blockchain?
State and local governments often spend large amounts of funds on securing and updating records manually. This process was improved by the implementation of computers, but having a ledger that updates automatically further increases the efficiency of legacy processes. Increased efficiency results in reduced costs for things such as titling, recordkeeping, and document management.
Blockchain also helps reduce possible fraudulent claims. Because all transactions are public, a party cannot claim that they didn’t purchase something and request a chargeback, which would have a negative impact on the fraud victim. This mechanic could enable state and local governments to decrease the number of financial fraud-based cases heard.
Where does Propy come in?
Propy has developed a mobile and internet-based platform for global real estate exchange. Their platform includes a real-time global marketplace. Propy combines blockchain development experience from Fortune 5 engineers with legal personnel who have syndicated large-scale real estate transfers and a “data-driven executive marketing team.”