Startup companies are using NFTs as a method for modernizing and improving the efficiency of real estate transactions. Even though the most popular NFT use cases today are music, and art-focused – many companies are applying the technology in other industries. This article overviews several companies launching services via NFT in the real estate industry.
An owner of a co-living space in San Francisco known as 20Mission is experimenting with a novel method of signing leases by utilizing the rising popularity of NFTs and cryptocurrencies. He is offering long-term leases that will be converted into nonfungible tokens (NFTs). A shared living area comparable to a hostel, SRO, or co-op has 41 bedrooms available for rent. The highest bidder will receive exclusive digital rights to reside there for 75 years.
The use of NFTs by Fabrica is creating “simple, online real estate transactions.” On their website, sellers list land parcels. Customers can view packages and buy them entirely online within a few days. Hundreds of properties have already been sold to buyers via the online platform. Buyers have the option to purchase parcels or rent them. More than 18 parcels of land are available from individuals and institutions on the platform. All properties are in the United States and the states of California, Colorado, and Arizona.
A house in Gulfport, Florida became the first home sold via NFT in February of this year. Auctioned off for $654,310, or about 210 ETH. Technically the home itself was not sold, rather the rights to the company which owned the property were minted into an NFT. Propy has processed more than $4 billion in transactions for customers and offers several digital real estate services, including buying or selling a home as an NFT, and buying, or selling a home using crypto.
NFTs might be used more frequently in mortgage products in the future. The first NFT mortgages have been made available by LoanSnap in the form of home equity loans using its Bacon Protocol. They handle loans in the same manner as ordinary mortgages, but instead of generating mortgage notes with liens, they issue NFTs.
The future of real estate NFTs
One of the constant themes for the companies mentioned above is that most of them do not advertise the use of NFTs front and center on their website. Instead of talking about what tech they use, the messaging is focused on how it benefits the end user.
Current real estate laws and regulations are not designed to accommodate blockchain transactions for real estate. However, many professional lawyers have speculated that NFTs and blockchain will dramatically transform the real estate industry.
Real estate applications for NFTs are in the early stages of implementation. In principle, NFTs can make it simple to transfer ownership of real estate, however, it will take time to go mainstream in this highly regulated industry.