Update: This demo has been updated by representing a property using ERC721 token. See why ERC721 is better than ERC20 to represent a real estate property
Blockchain is a useful technology to bring efficiency while closing a real estate transaction. If you are new to blockchain, please refer this link.
In this blog, we will cover how it can be used to digitize title registration which then helps to do a thorough search with confidence on title history by eliminating any chances of forgeries in the chain of title. The rest of the blog talks about a proof of concept developed by blockchains experts at JTC for title registration. We use Ethereum public blockchain to record the transactions.
It starts by representing each property as an ERC20 token. A company (or maybe county) can launch a custom ERC20 token to represent a property. In the example below, Title Co. is launching token named JTC to represent a property.
Behind the scene, it deploys a smart contract and creates JTC token. Title Co. wallet now has all the JTC tokens
Now, consider the scenario where Ap #867-859 Sit Rd. Azusa New York 39531 is up for sell and a buyer wants to buy the property.
At this stage, by verifying the ownership documents manually for the very first time, Title Co. will issue a JTC token to the existing owner. This will be recorded on blockchain. Once the transaction is signed and submitted by Title Co., one JTC token is assigned to Theodore Lower wallet.
We also built a title history viewer which queries all the transactions about this property from blockchain. At this stage, it only shows one owner.
Now consider Iris Watson is interested to buy this property. Title Co. will use the ‘Sell property’ function. The form will auto-populate the latest owner of the property from blockchain. It also allow to nominate a notary who will sign the deed along with grantor (seller) and grantee (buyer).
Once Title Co. will submit this form, it will create a deed and send it for e-signature to existing owner, buyer, and notary.
Once everyone signs the document, the token related to property Ap #867-859 Sit Rd. Azusa New York 39531 is transferred to new owner. The deed is recorded on blockchain as well. Property owner explorer now shows Iris as the new owner along with the ability to see the signed deed.
Since blockchain guarantees that transaction once recorded cannot be tampered with, the software we built demonstrates how it can now be used to transfer and record the title history and quickly scan through all previous titles as well.
The system is also capable to send a physical copy of the signed deed automatically to local county. If you are interested for a demo or see how we can build similar solutions for your organization, please reach out to us at firstname.lastname@example.org