# Tokenized Settlement dApp

In the real world, the settlement process for closing a real estate transaction is typically performed by an Escrow Settlement service. The process can be lengthy. With the Tokenized Settlement dApp, is instant as actual settlement occurs seamlessly at the time of sale.

The Tokenized Settlement dApp works by organizing the transfer of title between the buyer and seller and completing all regulatory paperwork that is required by the local jurisdiction in which the property is located. In most cases, regulatory paperwork can be executed on the blockchain such that no Local Agent is required.

The tokenized Settlement dApp will work with any Deed NFT for which there is an established Deed of Trust and where no Lien NFTs exist.

The Tokenized Settlement dApp works by allowing the buyer or seller to provide the details of settlement, via a Purchase Agreement NFT. Provided there is counterparty agreement, settlement commences.

Settlement is handled by a standard escrow smart contract where:

1. the buyer sends their payment (fiat or crypto);
2. the seller sends their asset (in this case a Deed NFT);
3. a smart contract completes the transaction by updating the ownership of the Titleholder and a new NFT is minted with the updated Titleholder owner;
4. the new NFT is sent to the buyer; and
5. the funds from the sale are sent to the seller, less commissions and lien repayments that precede tokenization (and the Deed of Trust).

Steps 3 - 5 happen at the speed of the blockchain recording the transactions and are executed immediately following completion of steps 1 and 2.

### **Local Authorities**

No local authorities are required as settlement occurs without any local legal work being required with the exception of:

* **Lien Repayment** - Authority for a Local Agent to settle an outstanding lien on the property using funds provided by the buyer.
* **Notification** - in some jurisdictions, the sale of an LLC that contains a property requires a notification of the sale to the jurisdiction in which the property is located. The production of this notification will be an Authority.

### **Taxation**

The sale of a Deed NFT is a taxable event as it represents the sale of an LLC in the United States. As such, each seller of a Deed NFT has an obligation to comply with the tax regulations based on their unique tax situation. These obligations are outside the scope of the settlement dApp.
