February 10 may go down as a momentous day in real estate history.
That’s when a 70-year-old brick home in the St. Petersburg, Florida suburb of Gulfport sold for the equivalent of $654,310, where the asset exchanged was represented by a non-fungible token.
Worldwide sales of non-fungible tokens, better known – of course – as NFTs, catapulted from $94.9 million in 2020 to $24.9 billion in 2021, according to an analysis of 10 different blockchain ledgers by DappRadar. In the past year, NFTs pole vaulted from mostly commodifying art and digital assets to an array of spheres including – very preliminarily – real estate.
The creation of the NFT real estate market thrusts a spotlight onto a Silicon Valley company specifically throwing itself into real estate, blockchain and NFTs. It also gives real estate agents ideas.
“Absolutely, I will offer an NFT option to sellers within the next year,” said Richard Hopen, a Compass agent in Short Hills, New Jersey. “It’s a great marketing tool for the right type of listing. NFTs are new and associating one with a house is likely to attract media attention.”
NFTs in real estate are, for the moment, a grossly impractical novelty act that, publicity aside, offer tenuous benefits to agents. But, to many, the intersection of NFTs and real estate holds great promise. And for homebuyers and agents alike, they raise the important question about what precisely is the problem NFTs and the blockchain claim to solve.
How a real estate NFT works today…
On a Facebook video chat, Amy Heckler of Heckler Realty in St. Pete’s Beach, Florida answered real estate agents’ questions, surrounded by a white and red Heckler Realty banner and two office plants. Heckler was the listing agent of the auctioned off Gulfport home. As she catalogued her experience, bubbling excitement around NFTs transformative thrall slowly subdued.
The Gulfport seller, Heckler explained, created a limited liability company that held ownership of the home. In creating a Delaware LLC, the Florida seller and Heckler joined forces with Propy, a five-year-old company headquartered in Palo Alto, California.
Propy then guided the seller into minting the LLC as an NFT. NFTs are digital tokens providing a certification of authenticity that you are acquiring the rights to what an NFT represents. For example, purchasing an NFT of a JPEG of a painting transfers the intellectual property rights of the painting. For the Gulfport home, the NFT did not represent the property itself. It represented LLC ownership of the property. <<<<<Article continued on HousingWire.com.
This article was originally published by HousingWire. The full article is available on HousingWire.com for HW+ Members.
