Episode 72: Revolutionizing Real Estate: Transparency & Efficiency with Rob Hahn
GUEST:
Rob Hahn is one of the most influential, if contrarian, people in the residential real estate industry. He is Founder and Managing Partner of 7DS Associates, which has been challenging the status quo since 2009. With 7DS, Rob’s strategy work has spanned the entire industry from individual agents all the way up to major tech companies, MLSs, brokerages, and franchises as well as major investment firms in the space. His clients include some of the largest organizations in real estate and he has advised tech firms such as Zillow, real estate companies like HomeServices of America, and major MLSs and REALTOR organizations. He’s also a well-known and often controversial keynote speaker at real estate industry events, author of one of the most respected & influential trade publications, a blog called “Notorious R.O.B”, and podcast host to “Industry Relations”. Prior to 7DS, Rob headed up technology and interactive marketing for Coldwell Banker Commercial at Realogy. He has a BA from Yale University and a JD from NYU Law. Today, he is building DecentRE Labs and DecentRE Property Exchange in an effort to make home buying and selling more transparent and efficient.
“This is gonna change the world. I don’t know exactly how, but I wanna be a part of it.”
THE EPISODE:
Today’s real estate landscape has many real world problems that directly impact consumers. Can web3 technology help solve some of the pains buyers and sellers face? A significant challenge exposed throughout North America over the last several years is the home buyer experience when competing against multiple parties. Is there a better offer and negotiation process than the traditional approach? Might more transparency benefit stressed out buyers and lead to more preferable terms for sellers? Rob Hahn lays out his vision for DecentRE Property Exchange, an on-chain real estate auction marketplace that seeks to empower consumers and their trusted professionals through transparency and efficiency. In this conversation Ashley and Rob dive into what a fully functioning decentralized real estate listings database could look like and unpack on-chain property auctions. Learn why blockchain technology matters to Rob for this use case, and about his future vision of a “house ledger”.
LINKS + RESOURCES
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LINKS + RESOURCES |
GUEST: Rob Hahn
Notorious R.O.B. (Substack)
Notorious R.O.B. (blog archives)
Podcast (“Industry Relations”)
LinkedIn
Twitter
Instagram
GUEST COMPANY: DecentRE
DecentRE Property Exchange
DecentRE Labs
White Paper
Medium
GUEST COMPANY: 7DS Associates
Website
EPISODE LINKS & RESOURCES:
REFERENCED
Propy - a Silicon Valley proptech company
Inman - real estate journalism, tech coverage, education, and events
Who is Gary Gensler? (article about SEC chair)
What was the Terra Luna crash? (article by Harvard Law)
What is a “DEX” (decentralized exchange)?
What is the “MLS” (multiple listing service)?
What is a “DAO” (decentralized autonomous organization)?
Who is “CREA” (Canadian Real Estate Association)?
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*NOTE: The transcript below does not include opening teaser and intro in time stamps. Begins at beginning of the interview… powered by AI (so may not be 100% accurate).
Ashley Smith (00:01.125)
Hello everybody, welcome back to From the Blockchain. I am so excited for today's episode. Today we're gonna be talking about real estate and blockchain technology. If you're a listener of the show, you know we've probably touched on this topic a little bit recently related to fractionalized property ownership investment. You know that I have a real estate background. But today we're gonna be talking about something very different than anything we've covered before. It's all about data, multiple listing service, otherwise known as the MLS, and real estate auctions on chain. Today I'm speaking to a gentleman named Rob Hahn, who's someone that I first came across probably in 2011, 2012 through my real estate association, governance leadership work that I do. And Rob can admittedly be a controversial figure in the real estate industry, but is nonetheless an industry insider. He's someone that is a regular keynote speaker. I've seen him speak many times. He often talks about disruption and innovation and industry blind spots. Over the years, he's talked about things such as generational changes, especially when it comes to the consumer, regulatory challenges, tech, and data. He is a founder and managing partner of seven DS Associates, which has been challenging the status quo since 2009. It is a US-based management consulting firm for the real estate industry. They work with select clients in all sectors of the industry, from associations to MLSs to brands, brokerages, and agent teams to technology companies, large and small, across North America. So we can, it's safe to say that Rob knows his stuff when it comes to this sector. He is also author of one of the most respected and influential trade publications, a blog called Notorious R.O.B., which is now on Substack. By the way, I should say Rob is otherwise known as Notorious Rob. He is a graduate of Yale University and NYU School of Law. He also has a great podcast called Industry Relations, and if people wanna get nerdy about some of the stuff that's going on in the real estate sector right now, outside of just blockchain and you want to hear some of Rob's opinions, you'll definitely want to check out that show. I am very excited to bring someone on that I've known for a long time before my Web 3 rabbit hole adventure, as someone who has been deep in the real estate industry and has been looking to innovate. I'm also going to get Rob to talk about his company, Decentre. Rob, Mr. Notorious Rob, welcome to the show. Thank you so much for being here.
Rob (02:49.51)
Oh my God, thank you so much for having me. And it struck me actually, you're right. We've known each other like forever. And we both came out of that, you know, realtor association, real estate MLS world, and I guess we're both like black sheep or something, right? Cause we both ended up sort of in web three space.
Ashley Smith (03:10.265)
Well, I should note, and you know, this isn't news to folks who've been listening for a long time, but it's actually my experience in the real estate industry that prompted me to want to learn about blockchain. I think it was probably around 2011, 2012 when Bitcoin was starting to have its day and blockchain technology was starting to come into like, I don't think it was common knowledge but more and more people were starting to know that it was being developed. You know, something that I figured... is if this technology matters, it's going to matter in real estate for sure. And I want to understand what the implications are. So I'm sure you've had your finger on the pulse with this tech for some time. Why don't you give us a little, no, give us some insight into, you know, who you are, where you are, and sorry, who you are, where you come from, and how you stumbled into this technology and why it matters to you. Thanks.
Rob (04:01.342)
Sure, no, I was just thinking, actually like you're obviously way smarter, way more futuristic forward thinking than I, because like, here's a memory I have, a very clear memory. I wanna say it was like 2015, I went to a blog world. So like back then it was like blogging, right? I remember going to blog world, I wanna say in Las Vegas, and I go up a set of escalators and there was a table of people selling this new digital currency thing.
Rob (04:30.922)
I was like, yeah, it's called Bitcoin and you should try it. And I remember thinking, this is a total scam. There's no way. Right. And just bypassed it. And I think at the time they were offering like some special, like I think I could have bought a Bitcoin for like 20 bucks or whatever it was. If I had known, could you imagine if I just said, oh, what the hell, here's a hundred bucks, give me five. So no. My journey, I think, is I had heard about blockchain.
Rob (05:00.522)
I wanna say in 2019, maybe 2018 for the first time, because Propy, you know, it's a company, I think you know very well, they're very much in sort of this on-chain transfer of title, et cetera. They did a webinar at an InMind conference, and I remember going, listening and thinking, okay, this, and I remember writing a post about this at the time, like this was a solution in search of a problem, because I didn't fully understand it, right? Because what they were talking about then was how title information is perfect for blockchain, right? The fact that it's immutable, right? You see all the records, all the transactions. Of course, real estate property title makes perfect sense. And I'm like, yeah, I listened to it. I'm going, yeah, but like you mentioned, I have a legal background. And the thing that I kept overwhelmingly come back to was, yeah, but just cause something's on blockchain is not title. Like title is government controlled, right? The government says, you know, what the property is, who owns it, what liens might be on it. And I couldn't imagine the government just kind of giving that up, you know, just because Propy or some, you know, bunch of smart tech people came along. I couldn't see the local clerk's offices saying, sure, take it over guys, we don't need these jobs. Like I, so I remember thinking that, and then sort of wrote it off, right? Said, okay, this blockchain thing is neat, it's cool, but you know, it's a problem, it's a solution to search for a problem. It wasn't really until 2021. And the context is I was speaking to a friend of mine who, you know, I met through my real estate sort of ventures and he was looking at the real estate industry and investing in some really big projects. We get to know each other and you know, he's like a big time hedge fund manager, right? And he tells me that he is moving all of his investments into crypto and Bitcoin, and that he's thinking about quitting and starting something like as a crypto hedge fund. And I'm like, okay, this is one of the smartest guys I've ever met. He's telling me this stuff. Maybe there's something to this. He tells me you need to investigate it. So I started to do a deep dive. And I think the very first thing I did was I watched all of Gary Gensler's MIT lectures. I mean, had I but known what Gary Gensler was going to become, I don't know.
Rob (07:28.898)
That was sort of like my initial, and then what really struck me at that time actually was, holy crap, it's not about crypto, it's not about title, it's about the underlying tech. And I was an entrepreneur in.com one, right? So, because I learned about the internet back in like college days in 1992, right? But it was just like this fun little thing, for like students to do emails or whatever, IRC.
But I remember when sort of that first internet, you know, hit the public consciousness. I remember saying, okay, I don't know how this is gonna change the world. I just know it's going to change the world. I wanna be part of it. So I did that. I had a.com, I had a startup, I sold the TSA networks, you know, it was fun. It was a great time. That was in my 20s, early 30s. I got that exact same feeling when I really thought about blockchain tech, this idea of distributed computing, right? And
That was it. So from that moment, I started thinking about, okay, this is gonna change the world. I don't know exactly how, I wanna be a part of it. And I'm not a young man anymore, but I know enough. So obviously, the first place you look at is the industries that I know, which is real estate. And I started looking at, okay, where can this technology actually be applied in real estate? I'd already written off title, because again, government.
So I started looking at a bunch of things. I started writing white papers and one of them was really by Baileywood, which is the multiple listening service. And I know most of your listeners probably aren't like realtors. They probably don't quite understand this little arcane corner, but there are applications of this technology to this corner of the industry that I think is absolutely perfect. So I wrote the white paper, showed it to some friends. He was like, this is great. Let's go start a company.
I was like, I need funding to start a company. He's like, no problem. I know everyone in crypto and VCs and the blockchain VC space. I'll reach the money in like two weeks, no problem. This is such a great idea. Four days later, Teraluna crashed.
Rob (09:45.558)
So yeah, I launched the company in the best possible time to do a startup. But you know what, it's actually been really great because I do think there's been a little bit exuberance, honestly, in terms of investment into this space. So clearing some of that out, and let's face it, we did have a whole bunch of bad actors, right? So clearing that out, I think, is gonna help us to actually focus on the technology itself and then really try to apply it to the real world.
And that's, I think what, when we started Decentre Labs, I mean, that was really the purpose is, I know this technology can let me do certain things, it's impossible with just sort of traditional technology. How do I apply it? Where does it best apply it? And I thought it was real estate and the MLS space. And we can get at some of the specifics of that, but to me, it really is trying to apply this new technology to the real world.
So, I mean, cause look, I mean, I think one of the criticisms I have of Web3, as it is today, right, is, and I went and I did all the things, like all the things. You know, I did the DEXs, I did the online trading, I did all of it, just to see. And my only criticism, my only real criticism of it is, so far, everything has been kind of virtual, and everything's been sort of inward looking and self-referential, right, meaning,
Okay, you have a DEX, so you could trade in a decentralized fashion, crypto and tokens. Like, yeah, no, it's cool, it's amazing, but is it having any real world impact? Not really, right? The huge NFT thing that was a craze for a while, or metaverse, or any of these things. I'm like, yes, that's all true, but it's still very sort of inward looking and self-referential, as opposed to, how does it affect the real world? Right, so.
That's what I was looking for, and there's nothing more real than real estate. And I thought I found a use case for this technology in real estate, so that's what I'm doing. All right, let me stop talking.
Ashley Smith (11:51.713)
No, I think that's great. The context matters. And I think it's important to note, as people are listening, especially those who may be in the real estate community, I think there might be some yeah-buts when they hear some of the things that you have to say. First of all, I'm gonna acknowledge, I probably have some biases because I've been so invested in the profession for so long. And the purpose of this conversation for me is really to unpack conceptually what can be done, and then try to understand the why. And I think that I did read your white paper, it made a lot of sense to me. So we both know that real estate is a sector that's gone, you know, unusually undisrupted, despite so many advancements in tech and consumer behavior. So it's kind of bound to happen at some point in the status quo way of doing things, you know, just can’t go on forever. So I'm hoping people listen with an open mind and think, can this work? But first, I appreciate what you said earlier, you know, what problem are you trying to create rather than try to solve type of thing. So when you're looking at the MLS, let's talk about that part first. What problem do you see in the current way that the industry operates around multiple listing service?
Rob (13:15.662)
So I'm trying to, there's so many problems. I'm trying to think, how do I get at this? I think the way to get at this is tell you kind of what really made me want to do C Center and do this auction based multiple listing service to start. Because like I said, we launched in like 2022, right? So all through 2020 and 2021, cause we all remember, we all remember going through like COVID hits and all of a sudden everything's frozen and people freak out.
And it was like, oh my God, housing's gonna collapse, real estate's gonna collapse. And not only did it not collapse, like there was this, I don't know, maybe a two, three week period when things went down for a little bit, and then it went straight up, skyrocketed, right? We have had the craziest housing market in at least the US, and I think in Canada as well, that I think we've ever seen. I know some of the stuff that I was hearing just in consulting and obviously my wife's still recovering broker, you know, most of my friends are realtors. And what I was hearing from them and from just like looking at the industry is this insanity, right? Of you get a home and there's a line of like 50 people and just multiple bids and some families, some buyers were putting in 15, 16 offers and losing them and just getting heartbroken. They find the dream house.
Like, okay, we love this house. The agent advised them, listen, it's listed for 350, right? But boy, there's a lot of competition. I mean, you saw in the open house, there are 40 other people there. Let's make sure you get this house. We're gonna bid 30,000 over asking. Lose it, right? And then the buyers would go, how did I lose that house? I bid 30,000 over asking. And you know what? They wouldn't know. You know, I imagine it's the same in Canada.
A lot of times a listing agent will not tell you, like what the competing offer is and why you lost. The couple times they do, they would hear things like this, oh you had a great offer, it really was, but the winner came in 5,000 more than you. The buyer sitting there going, I would have bid another 5,000, like if I had the opportunity to outbid that, I would have. So there's a lot of real pain I felt in the marketplace.
Rob (15:37.63)
And the source of it, quite frankly, is the lack of transparency. So before we get to the MLS, I think we have to sort of look at what is the problem with just real estate in general? I would submit to you that it's really this overwhelming lack of transparency, right? Now, it's not some evil like scheme, like this is the way like normal consumers look at this, well, these realtors wanna, no, that's not what happened, right? What happened?
is that the MLS and the real estate system in Canada and US, because we're the only two that have an MLS system, right? It was actually the height of transparency back in like the 40s and 50s. You know what I mean? Like before computers, MLS was actually the most transparent because every seller would say, okay, I'm gonna hire you Ashley to list my home. You would go and put it into local MLS and let all the other buyers agents know, hey, Rob's home is for sale.
it's three bed, two bath, here's the price, here's the square, like you would provide all this information, right? And that's wonderful, and it worked really well for 60, 70 years because of that. Problem is, okay, we have new technology. We have the internet, we have, forget even blockchain, we have the internet, we have computerization, we have all these advances in communication technology, but the MOS didn't evolve, right? We just still stuck to.
hey, if you want transparency, then the only way to do it is through the agent, and only agents can belong to the MLS, only agents can see, like, that's kind of where we got kind of got hung up, right? So it wasn't any sort of evil scheme or anything, it's just technology advanced, but we as an industry, the MLS specifically, failed to kind of evolve with it and go towards more transparency, right? So when I looked at the MLS, the way that it's structured, there are a couple of things about it. Number one,
They're all membership driven, so therefore they tend not to be transparent because their business model is subscription. That's number one. Number two, almost all of them are owned by realtor associations and that linkage is very hard. Like, there are all these code of ethics rules that you know this, you're Vancouver, right? That makes some of the transparency difficult to do, right? And we ended up in this place. So what I thought was, okay, if I wanna bring greater transparency to real estate,
Rob (18:00.254)
So leave the unless aside for a second. If I just want to minimize the pain of that buyer in 2021, who's just seeing house after house, making bid after offer after offer, losing them all, not knowing why, or losing it for like $5,000, like I would have bid more, you know, if we're to eliminate that, what's the best way of doing that? The best way of doing that in my opinion is open auction. And the only reason like we don't have that, we didn't have that.
in the past and we don't have it today is because technology. Like given the technology of the sixties, seventies, eighties, like open auctions are really hard to do, you know, with internet, with technology you have today, it's actually very easy to do. So I wanted to bring that to the table. The problem was you couldn't do open auction on top of the existing MLS structure. So I had to start it as an MLS and that's an area that I happen to know really, really well.
So here we are. That's the effort, that's the goal. And to me, neither of those things are really possible because there's some other stuff as well without blockchain tech, without this distributed web three permissionless mindset that technology enables it, right? So that's, here we are. I guess I'm now in the web three space as well because of that.
Ashley Smith (19:20.281)
So I'm gonna quick disclaimer, just because of depending on who's listening here. I could probably push back on some of the assumptions and I'm not going to, I think that would be a more interesting conversation on your show. However, that said, and the reason I say that is like there's nuances in different markets, the way things work and legal and privacy information, all this stuff, like regulatory stuff. But anyhow, we'll leave that for another day.
Rob (19:27.426)
Sweet Stoo! Yeah.
Rob (19:44.022)
Right.
Ashley Smith (19:47.605)
regarding the auction stuff. Maybe we should pursue that first and then go back to data since that's where we are. You know, I know that this did come up, at least in the conversation to some extent. I don't really remember why and who brought it up, but I know that at the height of this very tense, difficult, challenging market, this idea of auction.
Rob (19:50.734)
Sure, sure, sure.
Ashley Smith (20:12.897)
type, not on chain, just auction style transactions. And there's a variety of arguments perhaps, you know, for and against. But I do know that there are markets, in particular, I think in Australia, where
Rob (20:12.991)
Mm-hmm.
Just auction generally, correct.
Rob (20:26.378)
Australia and I think, uh, Netherlands. Norway, Norway. Yeah.
Ashley Smith (20:32.233)
Okay, do you have any insight you can offer just more on that approach and the experience in from those markets in terms of like how their real estate is handled?
Rob (20:42.022)
Yeah, I mean, only insofar as like from the outside, right? I've never practiced in either. I've never consulted with, you know, brokers or MLS in either. Um, but I've spoken to a number of the agents broke, you know, and brokers from those markets and it's pretty straightforward. You list a home, right? People can go tour it. They line up financing and typically in Australia, it's, it's not really an online auction, it's more of a like, Hey, this property will be sold on Friday. So do all your due diligence to get your work done and then show up and then you're going to bid, right?
And that's about 40 to 50% of the market there. And it seems to work real well for them. They like it. A lot of the times the sellers end up paying additional in order to market the property or do whatever. Then there's an auction and it's sold. And then whoever wins then goes and does a contract and sort of follows through that way. So the key concept there is with real estate, because there's so many factors, there's so many details, what I call non-financial terms.
Ashley Smith (21:40.962)
Yes.
Rob (21:41.558)
that the highest bidder is not necessarily going to be the one who ends up with the house. But the auction makes sure that you do get like a highest bidder and then they get the first crack at basically drafting the sales contract, right, to get the house done. I mean, that's sort of how things seem to work in Australia. I'm less familiar with Norway, to be honest with you. I just know that over 90% of their homes are sold via open auction. And again, I believe both of those are not really online.
Nevermind on chain, right? So one of the things I'm trying to say is like, look, if you wanna do a single day, like live auction, go do that and we can enable that. But really to me, it's the online component that I think, again, technology allows it. It's the best way of doing it, let's do it, right?
Ashley Smith (22:12.525)
Right.
Ashley Smith (22:24.196)
Mm-hmm.
Ashley Smith (22:30.553)
So, you know, it's funny because as I read through your white paper, because I had never really been involved in auction experiences prior to my spiral down the NFT rabbit hole. You know, that was the first time I had really heard language like open bid or like reserve price. You know, I'm not I hadn't been shopping.
Rob (22:34.412)
Yeah.
Sure, sure.
Rob (22:44.269)
Heheheheheheh
Ashley Smith (22:53.549)
for my art at Christie's prior to this experience. So I do think that it was interesting to see the parallels and the familiarity once I had been exposed to that. And I was very intrigued by this idea of these non-financial terms. Am I using the right language there? Yeah. And so maybe you can just outline a sample, an example of what that...
Rob (22:54.762)
Right, right, right.
Rob (23:11.862)
Right. Yeah, yeah, that's what we call them, non-financial terms. Yeah.
Ashley Smith (23:22.906)
might look like for a seller and a buyer.
Rob (23:23.822)
Sure, sure. So the concept, like when you're buying and selling homes, and I'm sure it's the same way in Canada, right? The idea is, okay, the home is listed for 450, whatever, right? And the agent will say, okay, there are all these terms in the purchase concept. In the offer, you're going to make terms like waiver inspection, maybe, like how soon can you close? Right? There are all these things that aren't just money, but they're important, right?
So I think the one that I like to use often is, say 10 day close, right? In a lot of states here, 10 day close is like super fast. The standard closing is 30 to 45 days. But you could have a seller, maybe it was like, I really wanna close soon, right? So I have two offers, they're both for 450. One says I can close in 10 days, the other one says 45 days. Well the 10 day close is that worth more to me, right? I would take that offer over the 45 day offer.
So our concept was, why wouldn't we just ask the seller and the listing agent working together to put a dollar value on that? And you could imagine this, right, if you're representing the seller and you have two offers, one's 450, one's 500, 45 day close, versus 450, 10 day close, right? Chances are your client's gonna take the 500, right? That's $50,000, man, for waiting another, you know what I mean?
What if it's 5,000 more? If it's $50 more, it's like, nah, I'll take the 10 day offer. So there's a price, there's a value to that seller that says, you know what, if you want a longer close, you're gonna have to pay me more. My idea was, why don't you just put it out there? Put it into the auction itself so you can say, hey, bidder, just so you know, here are the non-financial terms of what they're worth to me. We don't...
tell them what that's worth, the seller decides. Some sellers actually want a longer close. And some sellers might be like, hey, once I sell the house, I need 90 days to pack up and my kids are in school, whatever, right? I need to go find my next home. So they might actually say if you can close longer, it's worth more to me. And then there are all these other terms, as you know, like buyers have the right to waive inspection because inspection's a big deal. Some sellers could be like, look, if there's any chance this deal's gonna go south,
Rob (25:49.206)
because you're gonna have an inspection done and the inspection gonna uncover, I don't know, some termite problem and then I don't have a deal anymore. So if you're willing to waive that, that's worth a lot of money to me, it's worth this to me. Other sellers are like, I don't care, my home is perfect, I just want the money. To me, that's how we're handling that. We allow the seller and the listing agent to put financial dollar values.
Because on the flip side, what it does as a buyer, I know what I'm getting into. I know how to bid, how to make my offer strategically. Maybe waiver inspection is not something I'm willing to do. Cool, you can still win. You can still be the buyer. You just have to bid more. That's sort of how I'm balancing that out. Again, the whole end goal really is the transparency piece.
Ashley Smith (26:36.165)
Mm-hmm.
Ashley Smith (26:43.421)
I do think like what I'm hearing is, you know, it's taking away some of the intermediary stuff here because a lot of it has to do traditionally with negotiation and negotiation strategy. And so I'm sure if anyone in the real estate sector is listening, they're probably no, this isn't the.
Rob (26:56.206)
Sure.
Rob (27:02.642)
On a pushback girl, like seriously, I want to hear the arguments again. I've heard most of it.
Ashley Smith (27:08.149)
This is not actually a pushback. I'm mostly just curious how you see the professional sector participating in this part.
Rob (27:09.962)
Yeah.
Rob (27:14.57)
Yeah, oh, because here's the issue. Let's like, you know, say you take a doctor, right? Really successful doctor, freakin' brilliant in his field. And then he has to decide how much is a waiver inspection worth? There's no way, do you know what I mean? So the professional to me comes in helping the seller make those determinations. That's number one. Number two, it's not like the negotiation goes away, right?
Because all that the auction does is it determines, here's the winner, here's the sales contract with the terms you've agreed to. And now you get to go do all of the contract to close back and forth. And you know and I know it's gonna happen. It is absolutely going to happen. Again, if there's an inspection, something's gonna happen. There could be something with financing, something might happen. And you can go back and forth until, and make negotiations, make those decisions. So I do think...
It isn't, like, we're not, I didn't launch this thing thinking, okay, this is gonna lead to just consumers all doing it for themselves. I'm like, look, real estate, you're not buying, you know, luxury handbags, you're not buying NFTs, you know, you're not buying even cars, right? Because a lot of people are kind of experts, you know, they bought a lot of cars over there. With houses, it's the very rare person who's bought more than, I don't know, three houses in their lifetime.
Do you know what I mean? And there's so much complexity that I think you'd be a fool not to use a professional. It's just the professional advice then is just the advisory side and then negotiation post contract. But you should make it transparent from bidding up to the contract phase. That's our approach on it. And I think this is ultimately how we're gonna do things because the technology exists, it's absolutely going to go in this direction. It's better for consumers.
It's better for buyers, it's better for sellers, it's better for the professionals. It's just new, that's what it is. It's just new, it's gonna take some time.
Ashley Smith (29:18.585)
So with the on-chain element, what type of transparency would a would be buyer expect, for example? Like do they see how many other bidders there are? They tell us a little bit about that.
Rob (29:33.11)
So in our case, the only thing that is not sort of really public is any personally identifiable information, right? So just like, you know, Bitcoin, you would have a wallet address, and then you have the transaction. So the transactions in our case would be all the bids, all the terms. So you'd be able to see, okay, this wallet over here, this user, this is their bid, it's the current winning bid, right? And it's $450,000, waived inspection, you know,
30 day close and it's all cash. You know, something along those lines, right? They could see that, right? Not only could they see it, we write all of those bids onto chain so that you can verify it. Like you don't have to trust me. You don't gotta trust anybody. Like it's all there to see. And if there's a modification, someone comes in, tries to edit it, then you'll see that too, right? So let's say the seller says, okay, here's the listing. Here's the auction terms.
And we do allow, you know, editing those, you know, depending on certain circumstances. The big one being, if reserve has not been met yet, you can change your terms. So let's say you go out and say, look, all cash is worth $10,000 to me. And they decide, you know what, nah, I don't mind taking, you know, like, I don't mind taking non-cash financed offers if it's gonna be more money, so I'm gonna reduce it to 5,000. You know what it's gonna have? What we're gonna unchange, what it will say is, it went from 10,000.
decreased to 5,000. So full transparency, right? So that's how I sort of saw that. And again, you don't gotta trust me, you don't gotta trust the listing agent, you don't, like, it's all there. And I thought that was really important.
Ashley Smith (31:14.073)
Yeah, I will just as an anecdote add, and again, it's gonna be different all over, especially you're talking about United States or Canada, different provinces and states, et cetera. But where I come from in British Columbia, somewhat over the last year or so, we now have to register offers. So there's transparency around how many offers were submitted. And that is to kind of try to answer this question of mistrust really and feeling like was I duped? Was I told there were 10 offers but really there were only two sort of thing and I think generally speaking most professionals are acting you know in good faith and doing the right thing but I think the consumer fully expects that. Now to me I do think that you know whether we're talking about auction style or not these are the types of things that can be super helpful and I will tell you that as the practitioner having to do all that paperwork and it you know, it's not even verified it's still but having to do it all sucks It sucks. It really does There's just more and more of that type of a thing that's becoming more administrative like stress For the practitioners. So I think that in and of itself is really interesting And I do expect watching will be the solution at some point. It's just a matter of like how
Rob (32:10.059)
Yeah, yeah, it really does. It really does, yeah.
Rob (32:33.378)
courses. Exactly. Even the situation you mentioned where you have to register offers. Okay, register offers where? Right? In some centralized database somewhere. So then you have to trust that database. Put it on chain. You know, have the offers be written to on chain so then there's no need to trust anybody and you can see any modifications, any changes. Like that to me would be a way forward.
Ashley Smith (32:56.929)
Yeah. In our case, the public would still have no idea, of course, about the prices and the terms. And that is a more of a legal parameter issue here in my province. But I do. I think that when I was talking to you first about this kind of trying to understand the practicality. And I think that's where some folks have to stretch a little bit. Like, though, yeah, but what if the deal falls apart?
Ashley Smith (33:25.077)
And this, to me, what I'm hearing you say is, yes, there's some certain things, when I think about blockchain and smart contracts, and I use this really simple explanation very often, like if party A does X, it might trigger B and C and then those things happen. And in this case, I think that is true, but it doesn't necessarily mean that you've got a done deal there's still room for things to happen, due diligence, et cetera. And so.
Rob (33:55.566)
Correct, correct. And I think part of it is that, right, when you start taking fundamental technology like blockchain and trying to apply it to the real world, you have to be aware of your limitations. Have to be aware of what's possible today, what could be maybe future 10 years on the road, right? And we are building with some things that I think are going to be really amazing 10 years on the road, but that's not today. Today, where the blockchain piece comes in real handy is the whole transparency of all the bids.
All the offers. Where it comes in really handy is in governance. And that's a whole separate topic that anybody who's not a realtor has zero, like no reason to be interested in, but you and I as former, like as people who really understand organized real estate will find that interesting. And then there's sort of the futuristic. So no, I'm not interested in trying to do like AI smart.
contract boss that's going, no, housing is too complicated. There's too many things, there's too many, like there's an area where human beings are absolutely going to nest, or deals are going to fall apart. But here's the thing, Ash, you know this. Deals fall apart now. You know, like you can negotiate fully, have the contract, cool, from contract to close, deals fall apart, you know?
Ashley Smith (35:13.849)
Mm-hmm. And I bring that up less of a highlighting not challenges, but like the limits of some of this tech, but also just to help people have a better understanding of the use of the technology versus like trying to create a whole new sort of system through it. And yeah, I think, go ahead.
Rob (35:40.038)
I'll tell you the use of the technology I'm most excited about that has almost zero applicability today. Like we built it, this is how we do things right now, but I'm gonna be honest it has no applicability, it has no utility today. But I'm doing it this way because I see where the world, where society, where technology is gonna go ten years from now. And that's the house ledger.
It's not something I really talk about the real estate people because they don't care, but this audience, they might care. One of the things I'm most interested, one of the things that the blockchain tech allows us to do is to not have a centralized database, right? Okay. I feel like ultimately what I'm trying to get to is, so like your house has three bed, two bath, this type of furniture, this type of, I mean, not furniture, this type of type, this type of electrical. Whose data is that? Who owns the data to your house?
Ashley Smith (36:47.353)
I guess to some extent you would argue the MLS system has that data. Maybe, maybe government assessed tax assessors.
Rob (36:51.082)
of correct, right? But here's what I know today, who doesn't own that data is you. The homeowner, in a bizarre way, does not own the data to their own home, right? So when I looked at sort of the range, like one of the most exciting things about this technology for me is the notion of like sovereign digital identity, right?
And I was like, okay, that's too big. Like I couldn't work on that. I'm gonna let Jack Dorsey work. I mean, like I'm gonna let some of the real brilliant minds and brilliant engineers in our space work on something like sovereign digital identity, right? But what occurred to me was real estate and houses occupy a very unique space, right? Where it's not as private as like your medical information or your financial information, but it's also not fully public either.
Right? It's weird. I mean, the exterior of the house, yeah, it's fully public because it's like in the real world, like it's facing to the outside. But the inside of your house, there's something private about that. Right? Like you don't really want. The inside of your house just to be online somewhere on chain. So there's an element of privacy, but it's not as private, like I said, as medical or financial information. One of the things I think is really, really amazing, really fascinating that I'm just.
To me, this is what gets me really excited is, why could we pioneer this notion of self ownership of data around house data, around your home's data? And then, because this technology allows us to do this, you can transfer ownership. So right now in our system, we mint the house ledger. When the house transfers, we can transfer
control over that database to the new buyer by transferring an NFT. And this is a use case of non-fungible tokens that actually makes perfect sense. It's unique, it guarantees ownership, it validates it, and congratulations, you bought the house. Here's now your house ledger with all of the data about your home, including all of its financial history. Like all the bids on chain that led up to you buying it, that's all wrapped up, put it to the house ledger.
Rob (39:17.162)
Does it have any utility today? Of course not. But we could, because we're both Web3 people, we could see this, right? If someday we get to a point where the majority of the people out there have a personal wallet, a MetaMask, a Phantom, whatever it is, and they're able to then carry around important personal data, dude, why wouldn't you carry your house ledger? Why wouldn't you own that? So if someone says, I don't know, say I decide I'm gonna sell my house.
Ashley Smith (39:24.237)
Mm-hmm.
Rob (39:47.59)
I don't need to say, hey, Ash, come in, take a look, and then now you gotta fill out this damn form. All I have to do is, hey, Ash, you saw my house, here's access to my house leisure. Right? And you literally just plug in. Like, that's how I see.
Ashley Smith (39:59.636)
And so you see an opportunity to make additions. Like for example, if you do a renovation or you do something substantial, you can add that information to that house ledger.
Rob (40:09.934)
Mm-hmm.
Absolutely, absolutely. So you don't have to go back, oh, three years ago, I know I had some work done. What was it? No, it's done. Now, again, this is futuristic, right? But I could imagine a scenario where we no longer have, and this is the way Decentre is built, right? We're not built to be this big centralized database, like a Zillow, or whatever, right? We're actually trying to build it where it becomes a network of millions of tiny databases.
that each homeowner owns. Do you know what I mean? And then I think about what's possible with something like that. It doesn't have to be me. It'll be other brilliant Web3 entrepreneurs come along and say, oh wow, with something like this, you know what I can do? I can create something amazing. And yet you always allow the homeowner to be in full control of their own property data. I think that's pretty exciting.
Ashley Smith (41:07.349)
I do also think there's an interesting use case with entire buildings or like communities that are somehow attached and where there's management of those assets for a variety of reasons, things getting lost, things being mishandled, and you being able to see really what the most up-to-date information is and who's recorded that data. So that's, you know.
Rob (41:12.269)
Mm-hmm.
Rob (41:16.802)
That's right.
That's right. That's right. That's right.
Rob (41:29.314)
That's right.
That's right. And yeah, the vision I had was exactly the renovations scenario you mentioned, right? Because think about how often an agent has to go in, look at the houses, whatever, the owners lived there for 15 years, and you have to like, okay, well, what's your electrical?
Ashley Smith (41:37.913)
Mm-hmm.
Rob (41:49.834)
I mean, how many homeowners have access to electrical diagrams?
Ashley Smith (41:53.473)
Yeah, very few people know a lot about their homes. The period of time they know the most is when they buy it, if they've had a home inspection and if they hired a good home inspector, but that data becomes stale and usually lost.
Rob (41:56.084)
No.
Rob (41:59.778)
That's right.
Rob (42:03.887)
That's right.
usually lost, right? Now, here's the thing. I bought this house in Vegas and then I had solar panels put in.
I don't, I mean, I know I have them, right? But imagine if there was a house ledger where the solar company could essentially document, here's all the work we've done. Here's all the new panel we put in. I don't need to know it. I wouldn't even know how to understand it, but you know what, put it into my house ledger. So when I then go to, right?
Ashley Smith (42:30.849)
or even recording how efficient that thing is, eventually that will be there. So if you can record the energy cost savings.
Rob (42:34.414)
Correct. Of course it will. Of course. Of course, right. It's just that that's happening now. Like this is parallel tracks. So yeah, you have smart devices. You have that it's, you know, look recording all the energy usage. Great. Where's that going? It's going to like Amazon, right? I'm like, okay, I guess, but why can't I have that? Right. Can I get a copy? Can you write it to my house ledger? Like that's the concept. That's the idea.
And I think that's the exciting thing about Web3, right? This notion of total decentralization, right? While we still have this organizing principle, so it's not completely chaotic. I mean, to me, that's so exciting. That's, and they're trying to bring that to the real world. Like, that's exciting, right?
Ashley Smith (43:23.753)
I do want to make sure that we cover some likely questions that come up with your auction model and disenter. And so number one, right now anyhow, like you're talking, I think whenever we talk about buying and selling and using something using blockchain, people might wonder about crypto.
Rob (43:42.814)
Yeah, yeah, no, we don't do that. Because again, it's too difficult, right? And in the last two years, especially the height of the crypto sort of craze, there are a lot of companies out there saying, buy your house with Bitcoin. What they meant was, take your Bitcoin and then we're gonna convert it to US dollars and then you could buy, like that's not buying your house with Bitcoin. That's not the same thing.
Ashley Smith (43:49.007)
Mm-hmm.
Ashley Smith (44:05.305)
Right, yeah. The reason I ask, the people who are, sorry everybody, the folks who are listening who are like Web3 Crypto Maxis might be disappointed when you say that, but I do also think on the other hand, those that are coming from more of a what might this technology mean, how is it gonna benefit society, et cetera, they might hear you say that and think, oh, it's not as dangerous as I was thinking, because I think there's an immediate association with risk, fraud.
Rob (44:14.294)
Yeah, yeah. Yeah.
Rob (44:23.691)
Mm-hmm.
Rob (44:29.299)
Yeah.
Rob (44:32.818)
Yeah, yeah, yep, yep.
Ashley Smith (44:33.037)
money laundering, et cetera. And so when they hear you say this, we're talking about in this case for now US dollars, you're just changing the approach to how those contracts come together.
Rob (44:40.066)
That's right.
Rob (44:44.822)
That's right, I'm trying to be, we have grand visions, but we have to start what's possible today, where the technology really makes a difference today. Where that makes a difference today is in sort of getting to the point of contract. To your point, man, if you have multiple offers, as a listing agent, you have to read through 11 different offers and then create the spreadsheet and then present the net sheet to your seller and then try and pick.
Why? Why not just sit with your seller and go, okay, here's the terms, here's the dollar values. Let's throw it up, right? Have the auction play out, and then, boom, here's the winner. Here are the terms for your contract, right? And depending on the jurisdiction, we could just, like, here's the contract, go sign it. But you know and I know, especially real estate contracts, just because you have a contract doesn't mean you have a sale. There's a contract and then there's a closing.
Ashley Smith (45:27.836)
Mm-hmm.
Rob (45:43.326)
and a lot happens between contract and close. None of that changes, right?
Ashley Smith (45:48.025)
I do think though that's one highlight here is, and I haven't seen it that often, and I don't know what it's like in different places, but I think the thing about on-chain recording, which is, you know, yet to be seen, that would be very interesting, is not so much forcing the hand of the participants and making the deal happen.
Rob (45:53.367)
Mm-hmm.
Rob (45:59.022)
Mm-hmm.
Rob (46:02.455)
Mm-hmm.
Ashley Smith (46:08.077)
But people can't cry fraud. Like they can't cry that they did not sign that contract because that does happen when markets shift or when big deals, like I've seen it probably more from afar in commercial real estate where people just change their mind and they just blatantly lie. So I didn't sign that. And this I think is an interesting component that people might not be thinking about is like people that are active participants.
Rob (46:12.822)
That's right. That's right. That's right.
Rob (46:26.861)
Right. It's like.
Rob (46:37.855)
Yeah.
Ashley Smith (46:39.575)
They will go through a process and there will be, I guess, validation and verification of who that person is. And they'll be at the very least held to the standard that they're going to need to fulfill their side of the contract and then whatever that means in due diligence later.
Rob (46:44.511)
Mm-hmm.
Rob (46:53.503)
That's right. And if not, then obviously every contract has like, hey, if you breach then this is what happens. You can cancel it, but this is what happens. Like a buyer could be like, yeah, you know what? I'm not gonna do it. That's cool, we're gonna keep your earnest money. Or there are mechanisms. And that's nothing changes, right? You have to go to court, you have to bring a lawsuit, you gotta do whatever, right? None of that changes. And again, like I said, there are things that work really well in real estate.
Ashley Smith (46:59.737)
Mm-hmm.
Ashley Smith (47:15.175)
Mm-hmm.
Rob (47:21.762)
This is not a new industry. Title and escrow has been established for 100 years. We don't need to mess with that piece. Where I thought we could really have the improvement is just at matching a buyer to a seller. That's number one. Number two, and this is a little inside baseball and I know we're running out of time here, but for anybody who's listening to the Realtor, the other thing that blockchain lets us do, and I can't even wait to really implement this, is to me the best way of
doing governance for an MLS is a DAO.
Why have a board of directors? Let's just do it through a dial, right?
Ashley Smith (48:00.2)
I'll be on your show to talk about this conversation.
Rob (48:02.01)
Okay, because I'm like, look at some of these protocols out there that are DAO governed and very well, very effectively and they handle billions of dollars worth of notional value. Well, we could do that with MLS. We don't need to go through the way. So that's an example where I need this technology in order to enable that. That's another use case.
Ashley Smith (48:22.629)
Mm hmm. Maybe. Yeah, I know we can't dive super deep. And we've talked about Daoist to some extent on the show. But maybe can you give in your opinion, like a one minute overview of like, a what is the Dao? What does it stand for? And maybe how you see that in the real estate professional context?
Rob (48:35.17)
Sure, sure. So Dow, decentralized autonomous organization, where I'm using it is the MLS rules and policies, which I'm sure you dealt with when you were serving the Vancouver Association, you gotta go through all those rules and policies, right? Why? Why don't we just say, hey, you know what? You're a participant, you're a listing agent, you're a broker, you've submitted listings, you've done transactions. With every action, you get governance tokens.
Why go through this like board of directors thing? Just say, vote your tokens, make a proposal. You think a new rule should be created, make a proposal, discuss it like, you know, like DOWs do, and then you have a vote. People vote their governance tokens, up 51%, it wins. Up 42%, sorry, it fails.
Ashley Smith (49:24.277)
I definitely think the tech, there's a lot of clarity in these types of things. I think some of the human side still is a bit challenging. And that's where I'd say, hey, let's have this conversation on your show and I'm bringing a glass of whiskey. But there we go. However, I've thought about, for example, and I really need to learn the...
Rob (49:29.891)
Yes.
Of course. Of course.
Rob (49:39.518)
I like it. I recommend bourbon.
Ashley Smith (49:50.373)
Comparable language in the US because it's an area that I think is really interesting here in Canada strata Strata corporations and they're the companies Basically that govern apartment buildings. That's the best way I can put it this simplest way I can put it So think of it as a homeowners association of some sort
Rob (50:06.236)
Yeah.
Ashley Smith (50:10.773)
But I think about the governance of those and how that works and how people are involved or not involved or whether or not they use proxies, whether or not, whatever, there's a variety of things. And it's a, I think, especially where I come from, you know, people are, we're talking trillions of dollars of assets, really, really important. Are they being governed properly and, and managed properly and that's back to this house ledger type of thing.
Rob (50:16.598)
Mm-hmm.
Rob (50:33.802)
Very good point.
Ashley Smith (50:36.757)
Anyway, so I think there's an interesting case there. Rob, I'm wondering, what can you share about what you're working on today if people are wanting to learn more? Where are you in the process? Can people participate? Are you in beta? If they wanna see the mechanisms, how does this all work?
Rob (50:47.31)
Sure.
Yeah, no we're, yeah we're live and in production actually in the US obviously. In, I would say all the states other than nine, because nine of them we need an auctioneer license to do real estate and we don't have an auctioneer license yet, because we're like a pre-seed startup, yo, like we just started, so it's gonna take a little bit of time. But yeah, we're live. People go to DeCenter Labs and see the white paper, see the vision.
Ashley Smith (51:00.037)
Mm-hmm.
Rob (51:18.998)
They go to Decentre PX, Decentre Property Exchange is what it stands for. Um, we're, we're up and running, you know, as if you're an American, US based, uh, person, then, you know, we'd like to help you do something you want to try. Canada, one day I might want to do, but hey man, like we're not even really, like we're so young, we're just started. One day, you know, we'll talk about Canada, but you know, I've, so many of my friends are up there, so like.
Rob (51:48.702)
It's such, I would think so. So I don't, it's not a real high priority, but you know what, maybe, look, here's what I do know. I do know that there was a large Canadian company that was trying to do property auctions. And I think they're in a bit of a legal battle with CREA and Ottawa. And I'm like, I don't need to be involved with that, but we're just trying to prove like one use case of this cool technology and see if it makes things better.
Ashley Smith (51:48.909)
probably more hurdles up here to be honest.
Ashley Smith (52:18.465)
Yeah. And I clearly have people adopt it and want to use it. That's where the expansion of this data record, I guess really happens because people are using it and then there's more data, etc. Which I think falls into this whole discussion around the MLS, which probably deserves much more time. But, but, but our audience may not care so much about that.
Rob (52:35.192)
That's right. I know, no, that's an inside baseball thing right there.
Ashley Smith (52:43.193)
Yeah, but I do think, sorry, I know I've had you here for a little while, Rob, but I can't help but think about, you know, I've traveled a bit.
Rob (52:51.562)
Yeah. Yep.
Ashley Smith (52:52.285)
throughout Europe and Asia. And like, when you look at it from that perspective, you think, oh, the MLS brings a lot of value because it brings a lot of organization. Yes, it's central, but it brings a lot of organization. You go to a lot of these other countries and it's really difficult to be a property buyer because there's not a great database. And to be fair, it's probably been five years since I've really looked at it in any way as a, you know.
Rob (53:02.259)
Sure.
Rob (53:11.48)
Mm-hmm.
Ashley Smith (53:20.025)
foreigner in different countries. But have you given thought to this use case abroad where they've had zero or very, very little organization?
Rob (53:20.971)
Yep.
Rob (53:32.106)
Yeah, I have, like I said though, like organization is important. If governance can be done through a doubt, there's no reason why this can't happen everywhere because then I don't need to be an expert in some local law because the people who are voting would be, you know what I mean? But I need to prove it. I need to build it out. Just see that this works in the U S at least because other countries, you have to start with what's a multiple listing service. Why do I need one? Right. When they're in
Ashley Smith (53:44.952)
Right.
Right.
Ashley Smith (53:53.657)
Mm-hmm.
Rob (54:00.61)
you know, open listings world and there's no buyer agents and there's none of that. Right. So exactly. So it's a little bit trickier, I think there. So I'm like, look, let's, let's fix what we can here. But do I see a, you know, international application? Absolutely. Like I would love to talk to people if they're interested, like we'll share, you know, we just want to see this vision come through.
Ashley Smith (54:05.709)
They might have like 10 different representatives trying to sell it. Yeah, it's a mess.
Ashley Smith (54:26.253)
be neat to start in some small tiny country. Yeah, I Rob, I appreciate your time. I would love to dive deeper. I'm hoping we have more time to chat and see how this all goes. Please let our audience know where they can find you what you're working on.
Rob (54:27.762)
Yeah.
Rob (54:35.315)
Of course.
Rob (54:43.726)
Sure, I mean like I said, dcenterlabs.com is the website, dcenterpx, I'm on Twitter as at Rob Hahn. You know, I think people can find, Notorious Rob, like you mentioned, you were very nice. You know, that's when I sub-stacked my blog that I've been doing since 2009. So yeah, I think they can find me. I'm out there, so.
Ashley Smith (55:03.641)
Mm-hmm.
make sure to link all of those in the show notes. Everybody I'll also include Rob's podcast, which is great, especially if you're a realtor, and you're wanting to get them into the nerdy. I do implore especially Canadian real estate professionals to really pay attention to what's happening in the US. So I think that that's sorry, this is just a total random plug. But I think that's one thing that I've observed since my early involvement is the Canadian real estate sector to change as the sector is in general. I think there's just been, a lot of people don't know what's going on. They don't know what the risks and opportunities and disruption around the corner is. And so I think it's worth paying attention. So that's why I'm here in the first place, everybody. Thank you so much for being here with us, Rob. Have a wonderful day. Everybody else have a great week. We will see you next week. Bye.
