Blockchain technology is in its infancy. It must become much faster and able to scale a lot more information in a single block in order to be market-ready. The tremendous investment will be required in order to make it market-ready and the new standard for US land recording. That being said, change is coming and it’s not too soon to look at how the title search industry might adapt and become a part of the blockchain land registry of the future.
Obviously, buyers and sellers will be stakeholders in a blockchain land registry platform. Buyers and sellers will need another stakeholder: a “Land Inspector” who manages platform property requests, reports and confirms and executes transfers requested by buyer and seller. With their research background, title searchers are well-positioned to fill this niche.
Proposed Steps in Blockchain transaction:
1) Buyers and sellers begin by registering and creating their profile on the platform.
2) Sellers upload property description and documents to platform.
3) Buyer sends a request for property information to seller via platform. If approved by seller,
the information is made available to buyer via platform. If buyer decides to purchase they send
send a request to purchase to seller on platform. All steps are recorded on the blockchain
4) If seller approves the purchase request, the land inspector receives a notice from seller
to begin the process of transferring the property to buyer. Smart contracts are provided to
land inspector so they have access to land documents. The land inspector is charged with verifying the documents and scheduling a meeting to transfer ownership to buyer. A record of the meeting is added to the blockchain for future reference and/or disputes.
5) Land inspector receives & verifies documents submitted by buyer and seller and adds this
to blockchain platform registry. Buyers and sellers sign transfer documents with land inspector
present on the platform. Signed documents are saved on platform database and transaction is recorded on blockchain.
6) Signed documents can be viewed by any authorized party at a later date in case of dispute.
When blockchain technology becomes fast enough and scales exponentially, there won’t be a need for title searchers. It will take a long time to develop the technology and it’s likely that even then, future developers will begin with the present and move forward with document filings; similar to what happened with the conversion to digitization in the mid 1980’s. IT will likely take more time to develop technology that will go back to the beginning with US land records. Even then, it will take more time for all US counties to adopt it. Right now, there are vast areas of the US where you cannot get online land records that are sufficient to process a purchase transaction. The title searcher has time and is well positioned to be future land inspectors with their research backround. No system is perfect. Clearly, there needs to be a human touch that manages the information, communications, documents that go back and forth between buyer and seller and recording of transfer documents. The human aspect combined with the fairness and security of decentralized networks holds the promise of bringing more fairness to real estate transactions.