Global real estate market transactions will surpass $1 tln by 2020, private investors will make about one-third of those sales. The time and cost savings of doing deals directly between buyer and seller will make the Blockchain the main transaction platform of the future.
Real estate closings are a notoriously long process, involving appraisers, real estate agents, lawyers, bankers and insurers. Unsurprisingly, many real estate deals end up in disputes. The transparent Blockchain would make it harder to delay real estate deals owing to a lawyer off on a golf vacation or a bank lending officer waiting for an interest rate hike. All parties have access to a smart digital contract linked to the real estate asset—a single immutable truth of the real estate transaction process.
CommerceBlock, one of the first Blockchain marketplaces being tested by companies, provides anyone with the tools to manage the real estate sales and financing process. Flexible smart contract templates are being designed to accommodate different real estate contract terms. All parties with access can execute and monitor all stages of the transaction. Lawyers and bankers no longer need to control the escrow account. When the buyer and seller sign off on the deal, the escrow will be released to the seller’s Ethereum wallet.
One-stop real estate financing platform, HiP
HiP has decided to use CommerceBlock. The four-year-old digital marketplace for commercial and residential property buyers, owners and investors provide a platform where equity and loan assets can be freely and innovatively traded and shared – individually or in combination.
The tie-up completes the real estate transaction chain. The HiP platform provides financing while smart contracting, asset issuance, tracking and currency hedging are provided by the CommerceBlock suite. The platform manages all aspects of financing—property onboarding, due diligence, secondary market trading, trade settlement, risk management and asset servicing.
“When we were looking for a partner in the Blockchain space, CommerceBlock stood out for their history, technology and industry contacts. We believe in their model and their tech stack based on BIP-175. No other company in this space impressed as much and the partnership so far has been outstanding,” enthuses Kai Peeters, CEO of Hip.property.
Access to this one-stop shop for real estate buying and selling running on CommerceBlock infrastructure is gained through the CommerceBlock Token (CBT). “Powered by the CommerceBlock token, our partner will utilize the CommerceBlock network to manage their interactions with the public Blockchain,” explains CEO Nicholas Gregory. Once a real estate property is boarded onto the exchange’s system, the property ownership and due diligence are linked cryptographically to the asset. Only the investors can see the documentation ownership information. Property owners can then list debt and equity assets for sale via crypto and fiat currencies.
Back office settlement is another black hole in international finance, and not surprisingly the scene of some of the largest bank frauds in history. At this stage, too, property owners and investors maintain full transparency to a more efficient settlement system over the CommerceBlock Blockchain through a sidechain. Proofs are provided throughout the process.
The transparency and privacy of CommerceBlock’s real estate platform should lower fraud and disputes, but if disputes do arise a dispute resolution mechanism is activated. Instead of signing off and closing the deal, alternatively, an arbitrator chosen at the time of contract development can be activated. For international real estate transactions, currency hedging will be performed by the smart contract. Private investors who may have had a harder time securing real estate financing from banks are part of a movement of SMEs seeking bank alternatives.
BIP175 secures real estate deals
CommerceBlock employs advanced Blockchain protocols emerging from the Blockchain community. Since these standards have been peer-reviewed by the global Blockchain software engineering community, they are most likely to become the standards in commercial Blockchain applications.
Bitcoin Improvement Proposal 175 (BIP-175) was implemented by CommerceBlock to provide the benefits of the Blockchain to global commercial trade. This open-source standard facilitates connectivity between the private and public chains via fast and secure sidechains. The secure protocol provides parties to a contract with cryptographic proof of contract execution and details.
CommerceBlock, though, does not have access to the customer data. Different from traditional middlemen who have their fingerprints all over transaction information, CommerceBlock facilitates the structuring and transmission of the contextual information but does not directly access it. The Blockchain of the future will offer even more privacy. Universal credit ratings stored as an immutable Blockchain record could be attached to a loan deal, eliminating the need to access personal information to perform credit checks.
Pay to play with CommerceBlock tokens
Real estate is one of many industries that could benefit from the CommerceBlock Blockchain commercial transaction tools. Companies have several options to become members of the CommerceBlock ecosystem. One option is to download its SDKs and libraries and run the Blockchain supply chain suite on their own hardware. Alternatively, prepaid and subscription access is provided on a cloud-based platform. The concept is to allow members of the CommerceBlock ecosystem to design smart contracts with its templates and issue and distribute assets in global commerce with CBTs.
The CommerceBlock token sale
Anyone can join and benefit from the CommerceBlock ecosystem. The token sale, which will be conducted on the CommerceBlock issuance platform is an opportunity to test out the system. One mln CBT (ERC-20) will be available for public sale, with a fundraising target of $25 mln. Forty percent of the tokens will be used in the public ICO issuance, while 60 percent will be split between the company and provided as incentives to enterprise integration partners.