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Real Estate Decentralized
We currently find ourselves entering a world of burgeoning blockchain protocols. The architecture behind these emerging protocols must be crafted for their intended purposes to scale efficiently and with a defined scope. The scope for our ‘Tellus Blockchain Protocol’ is limited to real estate. Within a defined scope, we can develop a data structure for our blockchain that would allow the real estate industry to build applications on top of it to reduce inefficiencies. We envision a myriad applications for our blockchain protocol with or without mass adoption. With mass adoption one of the most ambitious uses of the ‘Tellus Blockchain’ would offer a method to streamline “chain-of-title” searches for the title insurance industry.[1] Other potential applications include a decentralized mortgage registry system—similar to the MERS database system, a decentralized MLS[2], a decentralized loan servicing platform, payment portals for property managers, a property tax payment platform, or a platform for any payments associated with real estate, such as home owner association dues, property insurance, and utilities to name a few.
Without mass adoption, an initial beta-testing phase of ‘Tellus Blockchain’ could bring immediate benefits by integrating smart contracts into a business processes. This could allow users to build applications for automated payments triggered by certain events such as confirmation of recording with the county or local recording authority. Implementing smart contracts into back-office operations can streamline and automate manual tasks. Real estate brokers could use the platform to pay their agents, landlords could receive payments form tenants, lenders could make loans secured by real estate, and loan servicers could receive payments. All of these transactional applications would interact on a single real estate specific blockchain network—‘Tellus Blockchain’. Historically, the real estate industry has interacted and conducted business transactions via manual proprietary and siloed databases.
The ‘Tellus Blockchain’ would create connectivity on a shared network and streamline these interactions.
With a decentralized database like the ‘Tellus Blockchain’, the legacy siloed databases could be updated in real time as data is transmitted on the blockchain network. For example, when two real estate brokerages (representing buyer and seller of the same transaction respectively) close a real estate transaction, payments can be made to all vendors within 10 minutes, and once completed, the MLS would be instantaneously updated as well. Moreover, not only would the vendors be paid, but the vendors’ internal routing of their subsequent payments related to the transaction would be automated as well. Efficiencies would be realized across the value chain, saving time and money for all.
Once it is implemented, data could also be updated across the network by businesses that operate nodes on the network. The transmission of data and payments would make markets more efficient and increase the speed and accuracy of transactions. The incentive for brokerages and escrow companies to use such a system involve efficiencies from automation and error reduction, leading to cost savings. These benefits would make the adoption of such a system attractive for users and would begin to populate market data onto the ‘Tellus Blockchain’ in real time. Redundant data manipulation will become a thing of the past for firms that operate a node and build applications on top of them.
Additionally, a blockchain explorer could be built to view the data and pull comparable sales, much like current MLS systems do so today. Taking that a step further, when landlords collect rents on the ‘Tellus Blockchain’ for their portfolios, they can also extract real time pro formas. This would allow owners to list their properties with ease and without questions of validating data, speeding up the due diligence process for buyers and lending underwriters for the properties.
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David Howie is the CEO and Founder of the Tellus Title Company, a blockchain real estate start-up. David began his career in real estate over 15 years ago and currently is on the Board of Directors of two other real estate firms in California.
At Tellus Title Company we have the right team, the right idea, at the right time. Innovation in the Real Estate Industry needs to start at the most basic level and from there it can ripple into the rest of the ecosystem.
This is why a tech company became a title company and developed the Tellus Blockchain Protocol.
With the evolution of Blockchain technology, we are bringing the latest advancements in technology to the real estate industry.