Team 6 Nandita Beri, Kevin Gannon, Diya Mathew, Hunter Rudd PROPCHAIN Team 6 Nandita Beri, Kevin Gannon, Diya Mathew, Hunter Rudd

The market for selling existing homes is large and inefficient 5.5 million houses sold last year; market expected to grow at 4%. 1.1 million home buyers wish they had better inspection, prior to purchase. Repair after moving in can be costly and inconvenient. CAGR = 4.8% https://www.nar.realtor/topics/existing-home-sales http://finance.yahoo.com/news/homeowners-regrets-buying-a-house-redfin-163113390.html

Current purchasing process puts the sellers and buyers at risk Ownership Transfer & Escrow Payments Steps in Purchase Hire a real-estate agent Find the right property Draft a contract Inspection & Appraisal Post Sale Issues Players Involved Buyer Agents Buyer Agents Buyer Agents Lawyer Notary Buyer Seller Agents Inspector Appraiser Buyer Seller Agents Insurer Lawyer Buyer Insurer Lawyer Misaligned incentives Superficial knowledge of house Time consuming Insufficient information > $300 Hidden problems undetected Major Inefficiencies Managed by 3rd party escrow account Faults uncovered Insufficient information for repairs

Keeping track of home improvement, repairs and maintenance is very inefficient Home owners are expected to maintain a timeline of events, with accurate records of receipts, scheduled maintenances and materials used, but there is NO official file or form. Without records, contractors and repairmen won’t be able to provide the exact materials that were originally used for the job. When purchasing a house, the buyer might not get full details on the repair and additions done, which might cost them in the future.

Inspectors & Appraisers Solution: Private, Permissioned Blockchain Propchain Parties to a transaction verify and publish to the chain Third-parties validate through cryptography to ensure immutability through nested transactions Trustworthiness provided by consortium members having competing interests and civil and criminal liability A single blockchain is created for each property thereby serving as an immutable record of relevant activity related to that property Property Owners General Contractors Real Estate Agents Permissioned, multi-party verification and security Material Providers Inspectors & Appraisers Sub-contractors

Example: Private, Permissioned Blockchain Propchain Publicly Visible Property ID or Address Private, Permissioned Registration of Title Real Estate Agents Ownership Change Property Owners Permissions to General Contractor Permitting for project General Contractors Sale Cycle Multiparty Verification Account Setup for project Sub-contractors Materials Billing Permissions to Sub-contractor Material Providers Installation Services Rendered Inspectors Verification of work Valuation & Sale Preparation

Example: Private, Permissioned Blockchain Propchain Property ID or Address Property ID or Address Publicly Visible Private, Permissioned Registration of Title Registration of Title Ownership Change Encrypted; Hash to Validate Permissions to General Contractor Encrypted; Hash to Validate Permitting for project Encrypted; Hash to Validate Owner View Account Setup for project Encrypted; Hash to Validate Materials Billing Sub-contractor View Encrypted; Hash to Validate Permissions to Sub-contractor Permissions to Sub-contractor Installation Services Rendered Installation Services Rendered Verification of work Verification of work Valuation & Sale Preparation

Blockchain technology provides the best solution Home ownership details & Price consensually shared and synchronized across network. Home inventory details shared with permissioned users. Distributed Ledger Remote independent writers Existence in absence of trust Disinter-mediation Economic Benefits Builders: Reduced cost due to lower wastage Buyers/Sellers: Better info. for decision making RE Agents: Quick and transparent negotiations Cryptographically secured transactions by builders, home owners etc. benefit RE agents, home buyers in future. Degree of inspection needed reduced greatly. Some administrative staff for builders and suppliers no longer required. Consensus network with immutable transactions and timestamps to serve as evidence in case of disputes.

Economic incentives for partners & consumers will get their buy - in Business Partners Consumers Material Suppliers Government General Contractors Home Owners & Agents Losers Administrative Staff Lawyers & Appraisers 3rd Party like Escrow office (in the long term)

Monetization Strategy General Contractors / Builders Real Estate Agents Inspectors / Appraisers Subscription Fee Decreases admin fees Reduces expenses attributable to overages Fee per property Accurate Pricing Accelerate deal flow Reduces time and effort spent on valuing the property Value Proposition

Inspectors / Appraisers Revenue Projections Annual Subscription Fee Contractors Top 280 contractors in US earn an average of $30M annually. Average small contractor earns $1.2M. There are 650,000 registered contactors in US. GOAL: Capture 1% of the market and charge 0.1% subscription fee  ~ $7.8M Fee per property (commission-based) Real Estate Agents Most real estate agents earn a median salary of $36,000. Top producers sell at least one home a month and earn around $150,000. ARELLO* estimates 2M active real estate licenses in the US. GOAL: Capture 5% of the market and charge 0.1% commission fee per property  $3.6M Fee per property Inspectors / Appraisers Average home inspector/appraiser earns $70,000 annually. There are 96,000 inspectors and appraisers in US. 5M homes were inspected in 2015. GOAL: Capture 5% of the market and charge them 0.1% fee  $340k Total revenue expected in Y2 of operation ~ 12M, expected to grow at CAGR of 4% *Association of Real Estate License Law Officials

Risk Analysis RISKS STEPS TO MITIGATE Success of platform contingent upon reaching a critical mass of users Offer services free to buyers Free access to government/policy makers Limit to details that can be provided (cannot solely reply upon) 80/20 rule: adequate to capture 80% of the information within a home on PropChain, allowing traditional inspectors to fill in gaps Complexity of inputs / technology intimidating to inexperienced users Implement a highly user-friendly, scalable interface (customizable views, filtering capabilities, etc.)

Risk Analysis RISKS STEPS TO MITIGATE Success of platform contingent upon reaching a critical mass of users Offer services free to buyers Free access to government/policy makers Limit to details that can be provided (cannot solely reply upon) 80/20 rule: adequate to capture 80% of the information within a home on PropChain, allowing traditional inspectors to fill in gaps Complexity of inputs / technology intimidating to inexperienced users Implement a highly user-friendly, scalable interface (customizable views, filtering capabilities, etc.)

Risk Analysis RISKS STEPS TO MITIGATE Success of platform contingent upon reaching a critical mass of users Offer services free to buyers Free access to government/policy makers Limit to details that can be provided (cannot solely reply upon) 80/20 rule: adequate to capture 80% of the information within a home on PropChain, allowing traditional inspectors to fill in gaps Complexity of inputs / technology intimidating to inexperienced users Implement a highly user-friendly, scalable interface (customizable views, filtering capabilities, etc.)

Government / Policy Makers Long Term Strategy Ability to transfer title - Simplifies a cumbersome legal process, saving significant time and money Sellers & Buyers More accurately reflects value of property additions (for tax monitoring purposes) Government / Policy Makers