A four-bedroom home in Florida will be auctioned off as a non-fungible token (NFT), representing the first home sold as an NFT in the United States. Blockchain startup Propy will host the auction. Bidders will be able to purchase the NFT using Etherium (a cryptocurrency). The winner will then acquire the Florida home’s property rights that have been “minted” as an NFT via a limited liability company.
Approximately 1,500 people signed up to participate in the auction (anyone interested can sign up here). The starting price-tag for the property is $650,000. Propy CEO Natalia Karayaneva has stated Propy has developed all of the necessary “smart contracts” and a legal framework that will allow tokenizing any property in the United States, potentially representing a new methodology for buying and selling real estate in the United States. Because the property rights are owned as an NFT, transfer of ownership can occur as quickly as a Venmo transaction. The project is backed by venture capitalist Tim Draper and the National Association of Realtors.
As it currently stands, one of the difficulties with purchasing real estate via an NFT is ability to obtain financing. While buyers with enough cryptocurrency to make the purchase can participate in the auction, lending options for purchasing an NFT are limited. Propy is exploring options to attempt to solve this problem.
The auction represents a significant step in potential disruption to the current real estate sale process, which many view as antiquated and unnecessarily cumbersome. The current process for purchasing a loan typically takes approximately 30 days and involves a significant amount of paperwork, bank transactions, and more. Modernizing the process via NFTs presents the possibility of significantly streamlining that process as well as anonymizing real estate ownership. NFTs, like the Bored Ape pictured to the right, have become increasingly popular and present an innovative way to combine ownership of “non-fungible” art and tokens with real-life benefits like access to private yacht parties or, as in this case, ownership of a home.
If you would like to further discuss this issue, or how Esquire Real Estate Brokerage can help you in the Southern California real estate market, feel free to give us a call at 213-973-9439 or send us an email at email@example.com.