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Friday, September 30, 2022

Propy Streamlines the Real Estate Transaction Process and Reduces Buyer and Seller Costs Through Blockchain Technology

Propy Uses Blockchain To Streamline Real Estate Transactions

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Adam West

Written by: Adam West

Adam West

Adam corresponds with finance experts to publish industry news coverage related to helping consumers achieve greater financial literacy and improved credit. He has more than 12 years of storytelling, editing, and design experience in print and online journalism and is most knowledgeable in the areas of credit scores, financial products and services, and the banking industry.

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Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro

Lillian brings more than 30 years of editing and journalism experience. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct instructor at the University of Florida. Today, she edits all CardRates content for clarity, accuracy, and reader engagement.

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In a Nutshell: Propy is a global blockchain-based real estate sales platform that already hosts more than 60,000 commercial and residential property listings. The Propy platform allows buyers, sellers, and agents to take part in a singular digital experience that makes property transactions faster, cheaper, and more secure while aligning with each participant’s local laws and jurisdictions. All transaction data and smart contracts live on the Ethereum blockchain.

Technology has changed so much of our everyday lives. From buying and shipping products to paying bills and communicating with friends and family, we live in an age that, just two decades ago, seemed nearly impossible.

But, despite all of the positive impacts, a few holdovers from the old-guard way of doing business persist. Take, for example, buying and selling real estate.

As if the long, back-and-forth process leading up to the sale or purchase of commercial or residential property weren’t arduous enough, you can’t collect your funds or get the keys to your new property until you sit through an extensive closing process. And those keys feel an awful lot heavier after spending hours signing pounds of paperwork to the point where your hand and wrists feel numb from exhaustion.

But Propy wants to change all of that. In fact, the global blockchain-based real estate sales platform already hosts listings for more than 60,000 properties and has helped coordinate sales in Asia, Europe, the U.S., and several other territories using both traditional and digital currencies.

Furthermore, Propy was recently backed by the National Association of Realtors (NAR) through its tech investment fund, Second Century Ventures.

“The company’s vision is to solve a number of different problems that impact the real estate space,” said Chris Garrett, Head of Sales and Marketing at Propy. “But the main goal we want to achieve is to streamline the real estate transaction process in order to make property transfers global, faster, and cheaper.”

Photo of Chris Garrett, Head of Sales and Marketing at Propy

Chris Garrett, Head of Sales and Marketing at Propy.

By conducting sales on the blockchain, the Propy platform allows buyers, sellers, and agents to seamlessly accommodate online transactions from any part of the world. That means no more exhaustive closings since you can complete entire transactions, from listing to closing, entirely online from anywhere you please. And, the Propy platform can adapt to the needs of all involved parties to satisfy a diversity of legal requirements in different cities, states, and countries.

“This takes the pressure off of finding local jurisdictions, finding trustworthy legal partners, operators, and payments,” Garrett said. “We are creating a single, adaptive online platform that is compliant across all legislation and will allow parties to conduct real estate transactions around the world.”

Garrett said that most buyers save as much as 25% when they use Propy to conduct a real estate transaction. And since the platform takes advantage of smart contracts on the Ethereum blockchain, agents won’t have to waste money on the many services and products they typically pay for to complete sales.

“What we’re trying to offer right now with our transaction management platform is a way to reduce the cost for brokers and agents who want to use this as a platform to process transactions,” Garrett said. “We do that by consolidating and combining a number of services that they’re already using into one platform so that they don’t have to spend money to use those multiple services.”

A Trio of Products with a Fourth Coming Soon

Propy launched in 2016 with its global real estate marketplace and has since grown to include two more popular services — a transaction management and recorder platform and a deed registration tool.

Screenshot of Propy Payments on a Laptop

The marketplace contains available properties from all over the globe in a range of values and asking prices. This includes large commercial real estate properties, such as the former headquarters of venture capital firm CrunchFund, which recently sold for $1.6 million on the platform. Regardless of the property size and value, once a buyer and seller come to an agreement, the transaction management platform takes over.

The entity that initiates the transaction — this could be the title agent, lawyers, buyers, sellers, or agents — invites the other participants. The platform’s configuration adjusts to each participant and provides whatever each person needs for his or her jurisdiction. The entire process remains streamlined as both the buyer and seller take part in a singular online experience.

“In the near future, we’ll also be announcing a new title registry product,” Garrett said. “It will launch soon, along with the first town that will use the product.”

But Propy isn’t depending on citywide deals to extend its already growing reach in the real estate sector. The platform already aggregates data from several MLS listings, and traffic to its own online listings continues to grow.

“Both the listing service and transaction platform are live globally,” Garrett said. “We’ve already completed transactions in Asia, Europe, the United States, and other areas. Our focus right now, though, is to grow our audience in the U.S. and Asian sectors.”

Blockchain Security Makes Transactions Safer, Faster

Companies around the globe are turning to blockchain technology for everything from tracking the origin of farm produce to conducting token sales to help fund a startup project. The technology’s safety is one of the most attractive parts of the blockchain and a major factor in Propy’s success.

“Security is one of the biggest benefits of using the blockchain,” Garrett said. “We use Ethereum and smart contracts in our blockchain platform to secure all of the documents throughout the transaction. We can timestamp them and put the deed on the blockchain to verify the transaction took place and who has ownership of the property.”

“We are creating a single, adaptive online platform that is compliant across all legislation and will allow parties to conduct real estate transactions around the world.” — Chris Garret, Head of Sales and Marketing at Propy

The platform also protects the buyer from the potential dangers that come when you have to wire a large sum of money for a down payment to a bank or title company — something that never feels comfortable until the recipient confirms the funds have arrived.

“Since our platform involves title companies within a transaction, there won’t be any risk of wire fraud,” Garrett said. “That’s because they’re going to be putting the payment instructions directly through the platform and have it secured through the blockchain where it can’t be adjusted.”

These are just two of the many reasons why Garrett and Propy think blockchain is the future of real estate transactions. And, since the Propy platform remains versatile, buyers aren’t forced to buy into digital currency to make their purchase. The company has already conducted sales in both fiat and digital currencies and has processes in place for either type of sale.

Users Can Potentially Save Thousands in Closing Costs

The average homebuyer pays between 2% and 5% of their new home’s purchase price in closing fees. A hypothetical homebuyer’s closing costs — based on the median home price in the U.S. of $226,800 — would range between $4,536 and $11,340.

But where do those fees go? When you use a real estate agent to purchase a home, it’s easy to be confused about the disbursal of those funds.

Propy LogoSince Propy automates so many of the real estate sales processes, the fees due to your agent could decrease substantially — instead of paying 5%, you may now pay 3.5%. So that $226,800 home could cost you $3,402 less. The more you pay on your home, the more you’ll save in interest over time.

And, since all of the transaction forms live on the blockchain, you don’t have to worry about your property records being damaged by fire, flood, or natural disaster. And digital records remain safe from corruption on the rock-solid security of the Ethereum blockchain.

Online security has become a significant issue for public and private entities. Major U.S. cities, including Baltimore, Maryland, have dealt with malicious ransomware attacks that cost millions to repair. Propy remains confident that its platform not only benefits buyers and sellers, but it can also be used to help cities protect sensitive files from data thieves.

That’s a tall task for one company to undertake. But if Propy’s first three years are a sign of things to come, the platform should have no problem rising to the challenge.

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