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Tell me you’ve never bought a house without telling me you’ve never bought a house. Buying houses are expensive because: - Realtors are a state-sanctioned mon

Tell me you’ve never bought a house without telling me you’ve never bought a house. Buying houses are expensive because: - Realtors are a state-sanctioned monopoly for real estate transactions and suck up a % of the costs. They also provide the necessary service of aggregating information about the market and negotiating on your behalf - Due diligence on the state of the property. This means inspecting that there’s no mold growing everywhere, checking that proper maintenance has been carried out, etc - Property law developed over literal centuries to provide the legal framework that we have now, if you damage something as you move out I can sue you to recover costs involved, we have statements about property state before closing, if the building doesn’t meet code we negotiate about who pays the costs - Property registries matter because legally speaking that’s a part of how you prove ownership. The county knows who to send the tax bill, if you default creditors can impose a lien, these are legal technologies that developed over time This is why you can’t just pledge your house as collateral and borrow against it in a HELOC like you can borrow against your stock portfolio. The bank needs to verify that nobody else has a claim on your property and that the property actually exists and is worth as much as you say it is. A house NFT has none of the legal protections of a SPA and all of the risks. If it’s not up to code you’re fucked, if the county has a tax lien there’s nothing you can do, etc. Us engineers like to think that everything is an engineering problem, and that’s often true, but law seldom works that way.

EdwardDiego 4y ago
> Realtors are a state-sanctioned monopoly for real estate transactions You know you can buy a house without a single realtor involved yeah?
boughtahouse 4y ago
I have bought two properties in two different first-world countries and also bought NFTs with Ethereum. The idea of houses on a blockchain are pretty much a pipe dream. But there are a lot of systems in traditional house buying that could be made easier with crypto-like ideas. Saying “real estate should be on-chain” should be read as asking for more NFT-like features in how real estate is transacted. - as a cash bidder you need to provide proof of funds to the estate agent, which might just be a screenshot of your entire bank account balance. privacy with a zk-proof could be used in theory here to hide your balance while still giving the agent confidence you can meet the bid - blind bidding process is usually opaque and broken, subject to discrimination and some winks and handshakes behind closed doors between friendly parties. a blockchain would give transparency and treat transactions equally regardless of race, sexuality, and friend or family ties. - settlement times are extremely long in the order of months, not seconds. this is sometimes just because some party including the agents are on holidays, or slow to respond to emails, or forget to sign some paper, or whatever. - escrow and exchange of funds in some cases could in theory happen with smart contracts where both parties sign a message to perform the exchange, which would reduce the significant commissions and fees. - the process feels archaic compared to buying most other types of property.
- maccard 4y ago
  I live in the UK (scotland specifically, where the process is different here). The house buying process here _is_ essentially decentralized but it's not trusting potential adversories by default. I don't think that many of your suggestions of crypto like improvements will help though. > as a cash bidder you need to provide proof of funds to the estate agent, Here, you don't provide them to the seller, you provide them to the solicitor acting on your behalf. Even if we removed that person from the chain, they are required to perform KYC on these transactions, so for regulatory reasons I still need to provide proof of those funds. > blind bidding process is usually opaque and broken, As much as I hate this, that's a (design) feature not a bug. Blind bidding doesn't exist in a vacuum, a seller is perfectly able to accept a bid from a party. Blind bidding is what a seller would use in a competitive market to extract the highest possible bid. If they wanted to accept a lower bid they could, by e.g. accepting their favourite bid at the second highest offered price. > settlement times are extremely long in the order of months, not seconds. This isn't because of transactions though, this is because mortgages take _weeks_ to come through, solicitors and agents take time to communicate/juggle multiple accounts/offers, and frankly they're still working with paper documents and off of the "who shouts the loudest gets service" system. > - escrow and exchange of funds in some cases could in theory happen with smart contracts where both parties sign a message to perform the exchange, The problem with using trustless currency for physical goods is that you need to trust the other party. If they just walk away without providing the keys or clearing the house out, it doesn't matter what it says digitally, you have a problem. > which would reduce the significant commissions and fees. On my past property purchase, I paid ~6% of the value in a transaction tax to the government, and ~£1000 in other "legal" fees. Meanwhile the actual transfer of funds cost me £0, (thanks faster payments - free almost immediate transactions up to £250k), and if I was a cash buyer, a bank transfer would have cost me £35. The fees are negligible even today. I've been banging this drum for years now, the problems you're outlining are not technical, they're policy and regulatory. You can solve all of the above problems with regulation, like we've done in the UK. That said: > - the process feels archaic compared to buying most other types of property. Couldn't agree more. It feels like being dragged back to the stone age.
  - boughtahouse 4y ago
xthrowawayxx 4y ago
What happens if you get hacked and someone steals your house NFT? Have a trusted third party transfer it back to you? Or give up your house to the hacker?
- meowkit 4y ago
  A snarky and simplistic question. Here's a simplistic answer: You could program the NFT to not be transferable based on a blockchain datetime or only transferable in an "escrow transaction" with a minimum exchange value (i.e. the market value of the house + some percentage). Or time delayed exchanges for important things like your house NFT.
  - dolmen 4y ago
    Owner lose the digital asset that proves his ownership. Now who owns the house? Do we have to let it decay forever?
  - maccard 4y ago
    It's not a snarky question, it's a genuine concern. Telling people to not worry about the details like "what happens in case of fraud" is handwaving away the problem. > (i.e. the market value of the house + some percentage). Where does the market value come from? "Market value" for properties varies wildly, and the number a property does not necessarily track to a fair market value - I might be willing to accept 10% under market value to someone who is a cash buyer because I need a quick sale, or I might be in a ripping hot property market where properties are selling for 20+% over their market valuations > time delayed exchanges That's all well and good if everyone involved is digitally contactable for the entire duration of the process, but if I'm ill for a period of time, or otherwise vulnerable, it doesn't matter whether the delay is 2 days or 2 months. The advantage the current system has is that there is inherently a central organisation that says "yes you own this" and they handle disputes. If you have an actual problem of suspected fraud (say your car catches fire with all of your ID in it), you can go to a government office, sign some legal documents, and get new ID and continue. Similarly, if someone impersonates you there are legal protections that can and are enforced.
IfOnlyYouKnew 4y ago
> Realtors are a state-sanctioned monopoly for real estate transactions This doesn't even make sense. 'Realtors" is plural, and there are many, which is incompatible with monopolies. Realtors have a monopoly on their trade only because anyone competing with them becomes a realtor, by definition. It's like complaining about the airlines' monopoly in air passenger transport.
- alxndr 4y ago
  "Realtor" is a trademarked term which indicates that a person is a member of the National Association of Realtors. This is the org which the parent commenter is calling a monopoly. https://en.wiktionary.org/wiki/realtor https://en.wiktionary.org/wiki/realtor https://en.wikipedia.org/wiki/National_Association_of_Realtors https://en.wikipedia.org/wiki/National_Association_of_Realto...

EdwardDiego 4y ago

> Realtors are a state-sanctioned monopoly for real estate transactions You know you can buy a house without a single realtor involved yeah?

boughtahouse 4y ago

I have bought two properties in two different first-world countries and also bought NFTs with Ethereum. The idea of houses on a blockchain are pretty much a pipe dream. But there are a lot of systems in traditional house buying that could be made easier with crypto-like ideas. Saying “real estate should be on-chain” should be read as asking for more NFT-like features in how real estate is transacted. - as a cash bidder you need to provide proof of funds to the estate agent, which might just be a screenshot of your entire bank account balance. privacy with a zk-proof could be used in theory here to hide your balance while still giving the agent confidence you can meet the bid - blind bidding process is usually opaque and broken, subject to discrimination and some winks and handshakes behind closed doors between friendly parties. a blockchain would give transparency and treat transactions equally regardless of race, sexuality, and friend or family ties. - settlement times are extremely long in the order of months, not seconds. this is sometimes just because some party including the agents are on holidays, or slow to respond to emails, or forget to sign some paper, or whatever. - escrow and exchange of funds in some cases could in theory happen with smart contracts where both parties sign a message to perform the exchange, which would reduce the significant commissions and fees. - the process feels archaic compared to buying most other types of property.

maccard 4y ago
I live in the UK (scotland specifically, where the process is different here). The house buying process here _is_ essentially decentralized but it's not trusting potential adversories by default. I don't think that many of your suggestions of crypto like improvements will help though. > as a cash bidder you need to provide proof of funds to the estate agent, Here, you don't provide them to the seller, you provide them to the solicitor acting on your behalf. Even if we removed that person from the chain, they are required to perform KYC on these transactions, so for regulatory reasons I still need to provide proof of those funds. > blind bidding process is usually opaque and broken, As much as I hate this, that's a (design) feature not a bug. Blind bidding doesn't exist in a vacuum, a seller is perfectly able to accept a bid from a party. Blind bidding is what a seller would use in a competitive market to extract the highest possible bid. If they wanted to accept a lower bid they could, by e.g. accepting their favourite bid at the second highest offered price. > settlement times are extremely long in the order of months, not seconds. This isn't because of transactions though, this is because mortgages take _weeks_ to come through, solicitors and agents take time to communicate/juggle multiple accounts/offers, and frankly they're still working with paper documents and off of the "who shouts the loudest gets service" system. > - escrow and exchange of funds in some cases could in theory happen with smart contracts where both parties sign a message to perform the exchange, The problem with using trustless currency for physical goods is that you need to trust the other party. If they just walk away without providing the keys or clearing the house out, it doesn't matter what it says digitally, you have a problem. > which would reduce the significant commissions and fees. On my past property purchase, I paid ~6% of the value in a transaction tax to the government, and ~£1000 in other "legal" fees. Meanwhile the actual transfer of funds cost me £0, (thanks faster payments - free almost immediate transactions up to £250k), and if I was a cash buyer, a bank transfer would have cost me £35. The fees are negligible even today. I've been banging this drum for years now, the problems you're outlining are not technical, they're policy and regulatory. You can solve all of the above problems with regulation, like we've done in the UK. That said: > - the process feels archaic compared to buying most other types of property. Couldn't agree more. It feels like being dragged back to the stone age.
- boughtahouse 4y ago

xthrowawayxx 4y ago

What happens if you get hacked and someone steals your house NFT? Have a trusted third party transfer it back to you? Or give up your house to the hacker?

meowkit 4y ago
A snarky and simplistic question. Here's a simplistic answer: You could program the NFT to not be transferable based on a blockchain datetime or only transferable in an "escrow transaction" with a minimum exchange value (i.e. the market value of the house + some percentage). Or time delayed exchanges for important things like your house NFT.
- dolmen 4y ago
  Owner lose the digital asset that proves his ownership. Now who owns the house? Do we have to let it decay forever?
- maccard 4y ago
  It's not a snarky question, it's a genuine concern. Telling people to not worry about the details like "what happens in case of fraud" is handwaving away the problem. > (i.e. the market value of the house + some percentage). Where does the market value come from? "Market value" for properties varies wildly, and the number a property does not necessarily track to a fair market value - I might be willing to accept 10% under market value to someone who is a cash buyer because I need a quick sale, or I might be in a ripping hot property market where properties are selling for 20+% over their market valuations > time delayed exchanges That's all well and good if everyone involved is digitally contactable for the entire duration of the process, but if I'm ill for a period of time, or otherwise vulnerable, it doesn't matter whether the delay is 2 days or 2 months. The advantage the current system has is that there is inherently a central organisation that says "yes you own this" and they handle disputes. If you have an actual problem of suspected fraud (say your car catches fire with all of your ID in it), you can go to a government office, sign some legal documents, and get new ID and continue. Similarly, if someone impersonates you there are legal protections that can and are enforced.

IfOnlyYouKnew 4y ago

> Realtors are a state-sanctioned monopoly for real estate transactions This doesn't even make sense. 'Realtors" is plural, and there are many, which is incompatible with monopolies. Realtors have a monopoly on their trade only because anyone competing with them becomes a realtor, by definition. It's like complaining about the airlines' monopoly in air passenger transport.

alxndr 4y ago
"Realtor" is a trademarked term which indicates that a person is a member of the National Association of Realtors. This is the org which the parent commenter is calling a monopoly. https://en.wiktionary.org/wiki/realtor https://en.wiktionary.org/wiki/realtor https://en.wikipedia.org/wiki/National_Association_of_Realtors https://en.wikipedia.org/wiki/National_Association_of_Realto...