Blockchain and Real Estate

By Mike DelRose Jr. Thursday, August 30th, 2018. Watertown, MA.

Sitting at a long fold out table in my Uncle’s living room, my cousin Stephen looked up from his phone, looked at me, and said: “Man, you should probably look into Cryptocurrency.”

It was Easter Sunday, 2018 and we were devouring a nice Italian meal. Our Family of forty or so, minus a few of us separated by distance, were crammed into the Colonial which is fitting due to how close we all are. My cousin Stephen is brilliant, one of the most tech-savvy people I know. He is extremely artistic, talented, and always an early adopter of something. So when he told me I needed to pay attention to something, I always listened.

I told Stephen I’d buy him dinner if he met me to provide an introduction to the world of Bitcoin and Cryptocurrency. He was more than happy to do so. After all, learning about the subject takes hours upon hours of research and learning. A couple of hours at a family event wouldn’t cut it. He also has the dream of getting into teaching. Great way to try it out.

2018 is was well past the speculative boom that made many people rich by investing in Bitcoin back in 2013 or whenever they were able to jump on board. It was well past the time my cousin made what many would call a boatload of money by investing in Ethereum when it first launched mid-2015. But that didn’t stop me from consuming every bit of information I possibly could. I was hooked. It was a new hobby, a new adventure, and I knew I was just scratching the surface.

Stephen met me as promised, taught me how to purchase Bitcoin and Ethereum on Coinbase, how to trade for alt-coins on Binance, and how to keep it safe in cold storage. We brought another family friend in, learned about projects, and invested together. Days and weeks of research followed. Other than actually investing, it can actually be a cheap hobby.

I knew if I wanted to accomplish anything with my new-found hobby I would have to apply everything I had learned to what I do for a living. Real Estate. I knew I wouldn’t be able to get rich quick as all those lucky one’s had before me. But what I could do, is apply this new hobby toward my professional life and prepare for the inevitable wave of new technology that would eventually take over.

I have always loved real estate. Ever since joining my Father in 2009 I felt at home, pun intended. But I also had a love for real estate tech. Implementing the latest and greatest into our Team’s services that adds value to my clients is something that drives me. I liked having the tech edge. So when I discovered Blockchain technology, the protocol that runs all Cryptocurrency, I knew I had my next unique selling proposition. I didn’t know how yet, but I knew that it involved blockchain. We just finished the craze of 3D virtual tours. We bought a Matterport™ camera in as early adopters, but now that the industry was catching up, I needed something new to focus my energy on. Bitcoin is a peer to peer cash system. At least that what it was originally designed for. For real estate, a peer to peer cash system could prove to be useful to a large extent, but peer to peer cash could be replaced with peer to peer data and information and fundamentally transform the way we conduct property transactions.

Startups and organizations like Propy, Atlant, Rentberry, and The International Blockchain Real Esate Assoication (IBREA) were already working toward providing real estate services on blockchain, but no one  had a working product that I would be able to incorporate into our day to day operations as a small brokerage. That is, until I found ShelterZOOM.

ShelterZoom is/was the first offer presentation and acceptance platform built on the Ethereum blockchain, and one of the handful of blockchain companies with a working product in the United States. I signed up on their website soon after logging on. This I thought, was amazing and I had to implement it into my website. It offers transparency and efficiency to an otherwise archaic offer process.

I forgot who called who but I ended up on the phone with Co-Founder Allen Alishahi. He had a familiar story. A 2nd generation agent out of New York, a Realtor® of 30+ years and someone who thought buyers and sellers deserved better. Unlike many blockchain companies out there, ShelterZOOM wasn’t a cash grab, they had a mission! Allen and I exchanged feedback and we kept in touch over the next couple of weeks. That was in the middle of May.

 

 

Things started moving extremely fast. The next thing I knew I was on conference call with Allen, Co-Founder Chao Cheng-Shorland, and their head blockchain architect. All I could think of was “What the hell is happening right now?” It was all very new to me.

The overall goal for calls like this was to prepare a message together on how this platform is going to change real estate for the better. By bringing agents on board, we could drastically improve the offer process which buyers and sellers alike desperately deserve. It is also incredibly humbling to be part of such a project in any capacity. And honestly, who in the real estate industry wouldn’t want that? Buyer agency is still relatively new (circa 2000), and uploading what I would call ancient standard offer forms for electronic signatures has finally caught on with those who avoided technology at all costs.

Coincidentally, while I was knee deep in new real estate tech, My wife and I began the home search for ourselves with the intention to list our primary residence at the start of the Fall. There was a property that we were extremely interested in. We had seen it at an open house, and would have been a great starter home. Overpriced at the time, a price drop occurred just as we left for Labor Day weekend away.

On Friday, I presented an offer with more contingencies than I’d personally like. I used a home sale contingency as my property was due to be on the market the following weekend and I wanted that extra layer of protection. There was also a contingency regarding flood insurance not being required as a piece of the property was in a flood zone, but not the house itself. On Friday evening, the listing agent and I verbally agreed on price, and they were due to sit down with the Seller on Saturday morning.

Long after the offer deadline went by, I received a reply from the listing agent that the home sale contingency was not acceptable. While I understood as much, that wasn’t the impression I was given when we verbally came to terms. I spent the next couple of hours covering my finances and was able to submit a new offer without the home sale contingency, equipped with an updated pre approval from one of my favorite lenders, I was excited that things were progressing. This was now Saturday, late afternoon.

On Sunday morning, and well past another offer deadline, I received an email stating my pre approval still indicated there was a home sale contingency. Not only was the lack of communication frustrating, as only email and texts were being used and voicemails were not returned, but my pre approval indicated that there was in fact no home sale contingency. I offered the agent to call my lender to confirm, but to my knowledge that never happened. The next morning, now Labor Day, I was packing my car after presenting my offer again for a third time with an updated deadline. I was aggravated. I had just received an email saying that my pre approval letter still wasn’t acceptable. I didn’t understand how a line item stating there was not a home sale contingency isn’t acceptable but I digress. I drove home stressed, only to receive a text message upon arrival that they had shown the property that morning and accepted another offer.

Now. Agents reading this are having a million thoughts regarding the situation. Was the agent just delaying to get a better offer? Did they sell the property themselves? Was there simply a much better offer? As aggravated as I was, it simply doesn’t matter. I can certainly fault no Seller for doing what’s in their best interest. That’s not the issue as disappointing as it was. I believe as a Buyer, I was treated incredibly poorly and strung along for the ride.

I did speak to the agent on the phone one final time. I told him that I deserved to be treated better than I was. I stated I understand if there is a better offer, but going through negotiations without any sort of response was not right. The agent chalked it up to Labor Day weekend, despite being able to accept an offer very quickly after a showing that Monday morning. No remorse for that. It is what it is.

While this would seem like a heartbreaking defeat, there is always another house. But more importantly, I have the solution. I’m working with ShelterZoom. A blockchain platform looking to restore efficiency and transparency to the real estate industry. Had I submitted my offer using the app, I would have seen exactly when my offer was viewed by the agent and the seller, removing any excuse as to why I wasn’t receiving responses 10-14 hours at a time regarding a property that had been on the market for a couple of months.

ShelterZoom Offer Process Demo

 

At this point, I’m on a mission. By bringing buyers and their agents onto the platform to adopt the technology, we can prevent the kinds of occurrences that consumers go through on a regular basis. We need agents committed to improving the home buying and selling process. Truth be told, there are some agents that at first don’t see why such a platform is necessary. After explaining to them how it affects the buyer in the midst of a home purchase, most of the agents I have spoken with wish they could have signed up months ago. Transparency is a big deal and has been lacking in the industry for as long as I can remember. In my personal situation, I probably wouldn’t have been able to use ShelterZoom due to the Seller on the other side of the transaction that had to review my offer in person. But as adoption progressives, I would expect the number of situations it cannot be used to decrease exponentially.

A week after Labor Day, I listed my own condominium in Greater Boston for sale. The goal for my wife and I is to continue the purchase process for ourselves, and seek out a single family home to start our family. We had a family apartment to move into, which really takes the pressure off as home buyers and sellers can attest to. The plan of course, was to list my condo and sell it using ShelterZoom. Timing. Was. Perfect.

Despite the market coming to a screeching halt around parts of Greater Boston with a couple of exceptions (that’s another story), I was able to put my property under agreement using ShelterZoom. I was able to walk the selling agent through the process as he indicated he wasn’t the best with technology while only taking a few minutes on the phone. He was able to add his buyer in, and I was able to counter quickly just to shore up a few dates and times. The documents were uploaded on the app, and I was able to send a one page PDF to my attorney with all of the executed offer terms. Success! And the start of a smooth transaction. As of late September, the property is past the purchase and sales agreement and on track to close. At the time, my ShelterZoom transaction is one out of roughly 100 accepted transactions globally. That number is primed to explode, and I believe it will happen due to the many buyers, sellers, and their agents that want to bring positive change to the industry.

So. That’s where our effort has been for the last few months. Opening RE/MAX Revolution in early January and getting right into the latest and greatest. We’re currently working with a new platform on the buyer side that hopes to change the way buyers shop for houses. I’m still in awe how fast these platforms are being rolled out. We’re extremely excited for the future and investing in real estate technology that will make the process of buying and selling real estate easier and more efficient for buyers, sellers, and their agents. Partnering with ShelterZoom and their affiliates reinforces our personal mantra here: “You deserve better.” We know that actions speak louder than words. Here’s to change. Here’s to disruption!