Reasi, a blockchain escrow platform, closed its first deal, the company announced this week.
The startup is trying to use blockchain — the technology behind cryptocurrencies that can also be used for other kinds of financial transactions — to speed up the escrow portion of real estate transactions.
“Our controlled transaction proves that our platform works,” Reasi CEO John Kang told Inman.
He first purchased a 55,895-square-foot piece of land in Redman, California, for $3,200 through a traditional real estate transaction that took 15 days in April.
He then sold the property to his brother, Paul Kang, for $3,000 worth of ether, a popular cryptocurrency linked to the Ethereum blockchain, the system Reasi relies on for its escrow technology. (John Kang said he should have sold it for $3,200 worth of ether but had a “mental gaffe.”)
John Kang bought and resold the property to compare the two experiences of each real estate transaction — a case study the startup is presenting to investors. Paul Kang made his offer May 30, and the deal, ran through Reasi’s system, closed three days later. The traditional transaction incurred a fee of $843, and Reasi’s system charged $19 for the transaction.
Reasi explains its technology this way in a press release:
“With smart contracts, Reasi enables parties to securely hold and verify funds until all steps of a transaction workflow are completed. Once all documents are signed and agreements are settled, contracts will self-execute and disperse the funds to the appropriate parties. Everyone gains immediate visibility into both the process and the funds. As a result, Reasi is able to save time and eliminate escrow costs for its users.”
Unlike Propy, another startup that has boasted of its milestone blockchain real estate deals, Reasi isn’t trying to move entire real estate transactions onto the blockchain. The startup is using blockchain as a tool to simplify and speed up the escrow period.
John Kang has a background as a loan officer and a software developer that inspired him to move into the real estate technology space. He co-founded Reasi about two years ago when blockchain technology seemed like a practical way to facilitate a peer-to-peer escrow model he had been thinking about.
Completing its first transaction through a cryptocurrency payment was a good way to test the product, John Kang said. But the company is hoping to soon complete a real estate deal in U.S. dollars.
John Kang compared Reasi to JetClosing, a tech-based title and escrow company. JetClosing, however, isn’t as focused on blockchain as Reasi.
Paul Kang is holding onto the property he purchased from his brother for now, but will likely resell it through Reasi after the company successfully completes a transaction in U.S. dollars.