In late 2017 the discussion about blockchain, cryptocurrency and their impact on the real estate market was very much alive, fueled in no small way by the mania surrounding Bitcoin that had surged to over $19,000!
The talk of technological disruption extended beyond simply the use of the blockchain and alternative payment systems for real estate transactions, to other elements involved in the transfer and movement of real property including title insurance.
The question that was and is being proffered concerns whether utilizing blockchain for real estate records, ostensibly providing with 100% accuracy and certainty the chain of title, outstanding liens, etc., would eradicate the need for title insurance.
At the height of the blockchain/cryptocurrency ‘mania’ in December 2017, Hallmark Abstract Service offered its thoughts in the article, ‘Can Blockchain Technology Ultimately Eradicate The Need For Title Insurance In New York State?‘ This is an excerpt…
‘…From the standpoint of title insurance, anyone who has ever visited the real estate records archive in the various jurisdictions across New York State will likely tell you that an often non-computerized decentralized record-keeping system and a paper-based trail would make it extremely difficult to implement an historical blockchain.
But that said, would it possible to take the title analysis compiled on a property by property basis going forward to create a blockchain of ownership?
The caveat is that this would of course assume that any title analysis done and then put onto a blockchain was 100% correct and that no defects to the chain of title were missed (i.e. the title report is only as good as the title company creating the report).
Additionally any analysis would likely only be done as a real property was changing hands, meaning that a truly valuable blockchain would be decades in the making…‘
The following article presents the thoughts of Matthew Lopez, president and CEO of MBL Title in Dallas, Texas. Matthew regularly participates in panel discussions and speeches on blockchain technology, cryptocurrency and its effect on the real estate industry and can be reached at [email protected]
‘Blockchain Technology and Cryptocurrency in Real Estate: Ready or Not, This Is the Future‘
Real estate transactions have endured the test of time with little to no changes in the last few centuries. Yes, for hundreds of years, buyers and sellers have entered into legally binding paper contracts, opened escrow accounts, conducted inspections, applied for bank loans, recorded transactions and deeds at the courthouse, obtained title insurance and signed what seems to be reams of paper at closing. But a major change is on the horizon, and real estate professionals across the world are taking note.
