How blockchain startup SMARTRealty is disrupting Real Estate?
Today we interviewed Ernie from SMARTRealty team on our coinmonks slack community, SMARTRealty is solving problems in real estate and replacing complex physical contracts system with smart contracts. Below is chat transcript of that interview.
Me: What is Smart Realty?
Ernie: That’s not a simple question, SMARTRealty is a project consisting of three primary elements. I’ll elaborate…..
The SMARTRealty contract platform — The contract platform consists of a template system that allows contract creators to create their own SMARTRealty smart contract that fits the needs of their specific transaction and complies with local statutes for their jurisdiction. This allows tenants, sellers, or buyers to solidify their agreements using blockchain technology.
The SMARTRealty listing platforms — The SMARTRealty listing platforms will allow property owners to list their properties for rent or for sale, and will distribute these listings to many other popular real estate sale and rental sites all across the web. This allows a complete synergy between our smart contract platform and traditional listing platforms, without requiring that traditional players (banks, title companies, etc. ) adopt blockchain technology to be a part of this “movement”.
RLTY Tokens — RLTY Tokens are the official SMARTRealty token for use with SMARTRealty smart contracts. Payments can be made with any major currency (crypto and fiat), but will be automatically converted to RLTY tokens so payments are properly recorded and tracked, and in compliance with the terms of the smart contracts established by way of our template system and listing platform.
Me: Listing platforms sounds like Airbnb …will it works like that?
Ernie: sorta, except there will be listing platforms for rentals, short term rentals (like AirBnB), and even purchase and sales. I like to describe our system as a mix between Zillow and LegalZoom, while integrating blockchain technology on top of them.
Me: How taxation works if some one is transacting through Smart realty platform?
Ernie: Taxation is, as usual, an issue for the user to work out. We are not creating some new age way of doing business, or even replacing traditional systems, instead we are creating an additional layer that works on top of pre-existing systems, adding security, convenience, and other benefits to them, as opposed to outright disrupting them.
We believe that our smart contract system will reduce disputes and the need for landlord-tenant lawsuits (which are so common these days). Then, once we are comfortably in place as a layer on top of those systems, then, and only then, can we push to disrupt and replace them, or at least force the traditional players to adopt blockchain technology due to demand.
Too many ICO projects and blockchain projects have a plan in place to disrupt and replace current technology by way of some sort of “pipe dream amazement” but its often impractical. Our view is that by utilizing a practical way of fitting our system on top of legacy systems and becoming commonplace in that regard, we are then in a better position to force disruption at a later time, if that makes sense
Me: Can you explain us via an example how smart realty will work ?
Ernie: Sure, so our first platform will be the rental platform, so I’ll work with that, Let’s say I’m a landlord and I agree to rent one of my units to you.
Normally I’d hand you a lease agreement and you’d sign it.
With SMARTRealty, this will be a Smart Contract instead. Not much different, but different enough, right?
You review the terms, and you “agree” by way of a small signatory transaction, like any other smart contract. Additionally, you pay your rent and deposit to the smart contract itself.
Now, the various terms can be adjusted for specific needs, for example, perhaps your deposit is held in escrow by the contract itself, but your rent payments are released to me monthly.
Additionally, the contract can be pre-programmed to serve notice to you in the event of a late payment, or non payment. so, as an example, if you don’t pay rent for March, you are automatically issued a “pay or quit notice” then, if payment is not made by the end of the notice period, you are issued a termination of tenancy notice.
This is the same as traditional contracts, but automated.Or, alternatively, lets say you pay rent for the entire lease period, one year for example
you are the perfect tenant and there is no problem then at the end of the lease period, you decide to move elsewhere, your security deposit is released back to you, because i have not claimed any damages, you have sight of the deposit the entire time and, depending on the jurisdiction we are in, you may have even made interest from it or gained on the value of whatever currency you used to pay it.
Me: What will happen in the case of disagreement between the landlord and tenant?
Ernie: That’s the beauty of our payment processing system. You can use any fiat currency for your jurisdiction (USD for example) or pay with crypto
All payments are converted to RLTY tokens though, to be recorded in the smart contract, which creates an ongoing demand for RLTY tokens
as far as disagreements, lawsuits will still be necessary, every jurisdiction has landlord-tenant court processes, but our smart contract system will make proving your side of events and claims so much easier, since the old “I paid him, I promise!” argument isn’t going to fly in the face of public ledgers.
Me: Can I buy smart realty tokens directly using fiat directly?
Ernie: Right now, no. You will be able to pay your rent/purchase with fiat, at listing platform launch, but we cannot accept fiat for the purchase of RLTY tokens as part of the token sale though, but that’s just due to US regulations. No payment processors will allow token sales with fiat, but they will allow smart contract payments with fiat.
Me: Are you talking to some real estate companies? Do you on-boarded any early adopters?
Ernie: Yes, we have several real estate companies in discussions with us currently. Even title companies and mortgage lenders as well. Our sales platform will launch with MLS integration (the listing service utilized by all major real estate listing services in the US), and we will have several real estate companies, title companies, and more, working with our system upon launch.
We have had contact with over 500 real estate brokerages as well, and tons of other parties involved. We have also brought on board people like Matt Murphy, who writes for Forbes and their real estate platform, as well as many different agents and brokers who want to offer our platform and services to their clients.
Me: How brokerage in real estate work in smart realty system?
Ernie: Ideally, they’d change nothing — listings on our platform would just be included in their MLS listings of homes available to their buyers. Additionally, we’d offer an additional layer of security and transparency of their clients want such a thing.
Me: So Smart Realty is contract automation at its core?
Ernie: Exactly. The most benefit applies to the end users, but the key, over time, is in forcing real estate companies and title companies, deed recorders, etc. to understand that eventually relying upon our system is more reliable and efficient than legacy systems, but we believe in providing the benefit to end users first is key to eventually getting those legacy players to adopting new technology, which most blockchain tech companies don’t seem to understand — it’s difficult to disrupt legacy systems, especially those in place for 100+ years, so dinosaurs will only budge if they deem it necessary and demanded by end users.
Me: So tell us about your team? who are they? how many members you have in your team? will there is a big operation side also in the business?
Ernie: We currently have 9 core team members, and about 15 additional team members via contractors and such. We are still building that team, but we are understandably careful about who we bring onboard. The development side of things is huge — we need front end listing platform development to work in conjunction with backend, smart contract development. Then we also have the ICO and marketing teams which must work with all of the above.
Me: “ convert fiat payments to RLTY without slippage and loss” this needs explanation?
Ernie: so anyone utilizing our contract platform has to be able to use USD or BTC or ETH or whatever they choose to pay their rent or purchase. Even if they pay in a legacy currency, like USD, it has to be converted to RLTY to be properly recorded and tracked.
Conversely, the landlord or seller needs to be able to (often automatically) receive the currency of their own choice. That means we cant allow a large payout to tank the market for RLTY tokens. So while exchange markets will ultimately be the determination of current value for RLTY tokens, we need to be able to allow “cash in” and “cash out” without major slippage, hence the need for a payment processing system and process that reduces slippage.
Me: When exchanges will control the pricing ..won’t it effect the platform?
Ernie: Exchanges will determine pricing because that’s what free markets do, but we can’t control or influence that — so while these transactions will be largely instantaneous, they will be on par with the exchange market.
So, for example, a rental transaction will go USD > RLTY > USD without much in the way of slippage, but while creating demand for the token itself.
Me: lets take a case …I deposited 10k USD worth of realty token while renting a property..next year realty tokens went 10 times ..in this case will i get 10k USD worth of realty tokens or whole realty tokens i deposited?
Ernie: If you’re talking about your security deposit, for example, you would get refunded your exact RLTY deposit. RLTY will be the ultimate denomination. If you prefer to denominate via USD or BTC or whatever else, then you’ll be subjected to market forces affecting the USDRLTY or BTCRLTY exchange rate.
Me: Tell us about your roadmap where are you now? when you will be in fully functional live state?
Ernie: We are actually ahead of schedule, in terms of our roadmap. Our smart contracts are currently in testing and we actually have a live demo listing platform here.
To be clear though, this is a demo site, and not an actual listing platform available for new listings but it’s about 2.5 months ahead of schedule, in roadmap terms.
Part of our allocation and roadmap includes the SMARTmortgage system in which we will be utilizing crypto to issue mortgages as well, a complete real estate lending platform that works in conjunction with our listing and contract platform, by 2020 .
with the SMARTmortgage system and the RLTY economy, we have to make sure we have a functioning economic system in place, which means we cant allow the market to control 100% of the tokens.
We have to be able to convert fiat payments to RLTY without slippage and loss even in the event of a $5M USD real estate purchase.
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