Propy, a blockchain based real estate platform, announced the sale of a $1.6 million San Francisco property owned by the venture capital fund CrunchFund, co-founded by Michael Arrington.
The announcement follows news of Propy’s highest cost transaction to date, a $2.4 million duplex in San Francisco, completed entirely on the platform.
Propy is a real-estate transaction platform that empowers buyers, sellers, their agents, and escrow agents to close a traditional real estate deal entirely online. The purchase offer, payment and deeds are uploaded to an immutable blockchain.
“The traditional real estate sale process is arduous and broken. Buyers, sellers, and their professional support struggle with overly complex interactions – it’s an opaque, dated, and unnecessarily lengthy process, full of risks such as wire fraud,” said Arrington, founder of TechCrunch, whose most recent venture is into blockchain capital investments and management with his $100m firm, Arrington XRP Capital.
“When it comes to expensive property or other expensive goods, these normally already have digital presentation of ownership, that’s why blockchain is applicable to space,” said CEO Natalia Karayaneva. “Blockchain’s main implications, after [virtual] money, is as a technology that enables ownership transfers… it aligns the entire process of any value transfer including real estate.”
Propy completed its first deal in 2017, and its first US transaction in Vermont 12 months ago. Worldwide, they have assisted in some form in over 60 real estate transfers. This includes auctioning a 17th century Italian mansion and UNESCO site on its blockchain.
The median price of a house sold on its platform is around $1.5 million, said Karayaneva, though the value of the houses is steadily increasing. About 20 realtors have closed deals on the platform, though 3,000 have signed up.
Karayaneva believes in two or three years the majority of real estate transactions will be entirely digitized. The company is working with county governments to provide technology that automatically and immediately reports the transfer of title deeds.
“We don’t want to work against them. Either we help them or will eliminate them,” she said.
The venture capital arm of the U.S. National Association of Realtors (NAR) recently invested an undisclosed amount in Propy via its REACH accelerator program. The company also raised $15.5 million via an initial coin offering in 2017.
Arrington previously purchased a $60,000 apartment in Kiev through Propy, using ethereum and smart contracts to settle the deal.
Sold house image via Shutterstock