Cross-border real estate business has always been a daunting task for both buyers and sellers. The difference in tax laws and regulations of the transactor’s countries make completing real estate deals across borders a tedious and time-consuming process. The conventional method of handling this kind of business deal comes with several complications and expenses, including the risk of fraud which may arise due to flawed or incomplete legal agreements.
Propy – an international blockchain real estate marketplace is seeking to solve this problem by leveraging blockchain technology and cryptocurrency payment options to facilitate connections between transacting entities leading to the seamless online purchase of real estate all over the world. Propy blockchain infrastructure promotes liquidity and can be utilized by various entities to prevent fraud and moderate redundancies.
According to Propy CEO, Natalia Karayaneva:
“The EU market can be a complex web of governments, brokers, and other entities making international property transactions difficult. Blockchain technology continues to revolutionize the way people buy and sell properties across borders.”
EU’s First Blockchain Real Estate Sale
With the recent purchase of a piece of real estate via the Ethereum cryptocurrency, Propy has now become the first platform to complete European Union’s first ever blockchain powered property sale. The transaction was carried out by a Spanish seller and a French buyer using ETH-to-ETH to successfully transfer ownership of the property. The completion of this transaction marks Propy’s first step in opening up its business service to the European market.
The deal was a success for all parties involved and showed just how useful blockchain could be in the real estate industry. Motivated by this success, Propy is already planning another real estate property sale using its platform; this is scheduled to take place in Spain in the near future.
Propy Blockchain Offering
Propy blockchain offering not only helps to simplify the process of international real estate purchases, but it also eliminates the problem of trust since blockchain real estate transactions are immutable and encrypted. This modernized approach has helped renew interest in real estate markets by investors from the United States and China who mostly seek out properties like sea-view villas within the range of $200,000. Propy will take advantage of this investor demographic, allowing them to search for properties and remotely purchase real estate online.
Users of Propy will also enjoy other advantages like lower transaction costs since the platform makes the use of intermediaries redundant. Buyers no longer have to go through banks, escrow services, lawyers or brokers to complete international deals.
Even though Propy conducts digital transactions, an authorized notary is still required to authenticate these deals before the transfer of ownership. Preceding a purchase, the notary validates the sellers signature by logging into the Propy platform. After the verification is completed, ownership is recorded on the blockchain registry as well as the state land registry. The presence of the notary will help settle potential “trust issues” between buyers and sellers that arise from the blockchain’s anonymity.
The Ethereum Problem
Blockchain powered transactions can be advantageous; however, using cryptocurrency for payment may pose some risks since the value isn’t stable. Even though Ethereum is somewhat a more reliable cryptocurrency; it is still vulnerable to market manipulation or sell-offs due to the lack of proper regulations in the digital currency market. Reliance on Ethereum for transacting could prove to be disadvantageous because of the considerable amount of money involved in real estate transactions. Buyers and sellers could lose out if the market isn’t favorable. Although stablecoins (a sub-category of cryptocurrency) seeks to solve the problem of instability in the crypto market by pegging their value to more reliable currency like USD, these coins may not yet be suitable for conducting real estate deals because many of them are still in the development stage and their stability mechanisms are not yet perfect.