An emerging technology, blockchain, could transform the way we buy and sell real estate by doing away with the hidden costs and inefficiencies of our housing markets.

Given the blockchain’s disruption of financial services, it’s hard to find a segment that has not been influenced by the technology. Cryptocurrencies have made a strong impact on payments, remittances, and foreign exchange. Initial coin offerings (ICOs) have challenged stock investing, startup loans, and venture capital.

To briefly summarise what blockchain technology is:

The practical consequence […is…] for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate. - Marc Andreessen

Real estate hasn’t escaped blockchain disruption either. Previously, transacting high value assets such as real estate exclusively through digital channels has never been the norm. Real estate transactions are often conducted offline involving face-to-face engagements with various entities. Blockchain, however, opened up ways to change this. The introduction of smart contracts in blockchain platforms now allows assets like real estate to be tokenized and be traded like cryptocurrencies like bitcoin and ether.


  • A truly electronic, secure property sale, where paper deeds and title fraud were history

  • A digital lease which automatically withdrew rent payments and service charges with no human error and a full audit trail

  • A self-governing accounting system where each transaction was automatically balanced and recorded without fear of manipulation

  • The amount of investment capital which could be unlocked if everyone had access to the market

  • A secure electronic record tied to each corporate or individual identity showing their credit history and other details

  • A commercial building where every system was securely connected, adjusting to the needs of its occupants without human intervention

Blockchain isn’t something that’s just being tossed around Silicon Valley, it’s real enough that firms like IBM, Deloitte, KPMG and others are putting lots of time and effort into it. Many other tech-forward real estate firms are also pushing the technology forward, says Ragnar Lifthrasir, Chairman of the International Blockchain Real Estate Association.


Distributed ledger technologies would prove useful in almost all types of real estate activities, including money transfers, property registration and the conclusion of agreements.


Money Transfers

Purchasing property using cryptocurrency and without intermediaries such as banks is already happening. In the near future, the blockchain would be used not only in terms of payment in cryptocurrency, but also for transferring conventional (fiat) money and national digital currencies issued by central banks.

Property, Transaction and Title Ledgers

Information on real estate, transactions, title registration, property encumbrances and their condition can be entered into distributed ledgers that are accessible online and through mobile apps. Several countries have already launched pilot projects to test such systems. For instance, Sweden has been evaluating the potential of using blockchain technology in managing its land registry since 2016.

Each property would have its own blockchain ID with all its technical characteristics specified. Among other things, this would make property appraisal easier and quicker, as each transaction currently requires correspondent documents to be ordered anew and these Bureau of Technical Inventory (BTI) certificates are not always trustworthy. It is also likely for that there will be portals and MLS databases with properties that have blockchain IDs.

In a year people will be surprised at the marquee real estate companies who are adopting blockchain, says Lifthrasir

Smart Contracts

Smart contracts are transactions and other agreements concluded entirely digitally whose execution (i.e. transfer of ownership) is guaranteed by computer protocols with no human involvement. The same protocols automatically check the transaction possibility and legitimacy; they will not allow the agreement to be concluded if its terms do not meet established standards.

The idea of smart contracts dates back to the 1990s, but blockchain and similar technologies can make smart contracts safer and more reliable. Property sales and rental transactions can be realized through such contracts. In September 2016, Deloitte announced the launch of a pilot project for registering rental transactions via the blockchain in association with the City of Rotterdam and the Cambridge Innovation Center.

Escrow accounts are often used in buying and leasing real estate. For instance many landlords in the United States require their tenants to place a rental deposit in an escrow account, from which the money cannot be withdrawn without the landlord’s permission.

Today, escrow accounts are primarily held by notaries and banks, but distributed ledgers can change the situation. For instance, buyers can place their money in a blockchain escrow account. After commissioning the new build and the buyer getting the right of ownership, the money would automatically be released to the developer via a smart contract.


Owners of flats in apartment buildings often make decisions affecting shared infrastructure, such as major repairs or works on common areas, by voting. Distributed ledger technologies would guarantee reliable remote voting and give owners the certainty that their votes have been registered correctly. The blockchain would also prove useful in other situations, such as when real estate decisions are made by voting, for instance, in unitholder or stockholder voting.

Is Real Estate Tech Disruption the End of The Property Agent?

I think that real estate agents will need to approach their role from the same angle as a Private Banker.

The quick answer is “NO”.

However, as with any industry, staying stagnant without evolution would mean certain death. Thankfully, there are available technologies and real estate platforms that allow one to transact on their own. But even with the appeal and support of growing trends, it will take time and more advanced tech before a greater shift in behaviour towards performing “do-it-yourself” (DIY) real estate transactions will be adopted en masse.

Who knows, it may not be long that the real estate salesperson earns their rightful fees by way of crypto-currency in the future.


The future of real estate

With the advent and growth of the Internet of Things (IoT) and the convergence of the physical and digital world, there will be new opportunities to leverage the power of blockchain.

The system allows companies to operate much faster, cheaper and with much more security against cyber-attacks alongside the benefits of lower error rates, less risks and a lower capital requirement — and these principals spread far and wide throughout the industry with a host of benefits. This might include the proliferation of fractional ownership as a blockchain approach would facilitate the verified investment in a small proportion of a much larger development — an element of the market which is only available to investors of scale.

Blockchain could overhaul the transactional element of the industry, moving towards a completely transparent future, and radically reducing the chances of fraud while also speeding up processes which have remained centuries-old blocks to progress. So, my bet would be on a move to blockchain in the relatively near future, a transition that will create genuine disruption — for the good — in an industry that has always been reluctant to change.

But that’s for the future. For the moment, blockchain will make the real estate industry faster, more precise and more affordable.

Let’s talk about the problems of real estates and the solutions for them with the help of the blockchain technology.

Thanks for reading! :)

BLOGOndrej Chudy