The tokenization of real estate has so far been focused on facilitating fractional ownership of properties through blockchain technology. But there’s another kind of token that doesn’t have to do with property ownership — and that’s where the Canadian real estate tech company RESAAS wants to innovate.
RESAAS partnered with a San Francisco-based company, Real Estate Consortia, to develop Ethereum-based utility tokens that will track information on properties. Using blockchain technology, the two companies hope to develop a version of CarFax for real estate that will tell buyers or investors everything to know about a property in one place.
“Property is the single biggest asset class. It’s a good place to have as much information as you can get,” RESAAS CEO Tom Rossiter said. “The token will contain everything that relates to a property that is meaningful to a prospective buyer.”
Blockchain is the technology that powers bitcoin and other cryptocurrencies. The distributed ledger records secure financial or informational transactions without a middleman slowing down the process or increasing costs.
RESAAS hopes to create tokens for every property in the United States and Canada. So far, the two companies have built tokens in a few test markets in California.
The tokens would record information that’s currently scattered between different parties: history of ownership, title information, information on lending related to the property, any liens against the property, homeowner’s association requirements and insurance information. Having all that information readily accessible could add to the value of a property, Rossiter said.
Blockchain allows multiple parties to contribute that information in one place without compromising security.
To build this database, RESAAS wants real estate agents to create tokens for all their current and past listings. Even though most agents aren’t familiar with blockchain technology, Rossiter said they’d still be able to create these digital records.
“Just because it’s wrapped in a token or blockchain — that’s great, and it’s necessary technology,” Rossiter said. “But the principle is: let’s do a better job as an industry keeping records of everything related to a single property.”
RESAAS has about 440,000 agents who use its platform RealTimeMLS as a referral network and communications tool. The company hopes that those agents will be the first to start creating tokens for their present and past listings.
The company also plans to reach out to real estate associations and brokerages to get more agents involved. RESAAS will compensate agents for making tokens as this effort gets off the ground.
“Having built San Francisco’s first real estate brokerage to accept Bitcoin, we have curated our token around keeping the Realtor as the hero in the transaction. This is the perfect application for blockchain technology, allowing anyone to backcheck and validate a property’s history and provenance,” Teresa Grobecker, CEO of Real Estate Consortia said.
After making agents aware of its token development, RESAAS plans to approach more consumers. Homeowners will be able to add information about their own homes to that property’s token, like any renovations they’ve made.
CarFax doesn’t rely on blockchain to create its comprehensive car records, but the real estate version will.