Also, we're back to the fundamental problem which is that you can't use a house as collateral on the blockchain but you can in the real world.

There are also things like leveraged buyouts of companies which operate on a similar principle. The capital for the buyout is fronted by a bank loan secured against the company being bought.

And again, there's no timing issue because humans can understand there isn't really a sequencing issue and one party isn't going to just disappear with the funds halfway through the process, and everything is reversible through banking and / or the courts.