Can the final moment of signing a contract to buy and sell a home using NFTs and cryptocurrency be described as an instant, a click of a button, or another wallet transaction?
On the one hand, using NFTs to buy or sell real estate simplifies the process and speeds up the completion of transactions. NFTs' smart code and digital document storage offer the same benefits as software platforms that consolidate data and integrate disparate workflows. On the other hand, the magical properties of NFTs do not eliminate the time and work that goes into preparing for this quick completion, and creative workarounds are required to make the transaction legal.
But real estate NFTs, if issued, could become economically interesting.
You can’t avoid the city (or due diligence)
NFT's smart code allows you to centralize, organize and store all your important documents, simplifying a cumbersome process. However, there are still some steps you need to take: due diligence.
Human processes can take days, if not weeks. Appraisals, title reports, title searches, the list goes on. At the local level, many states require documents to be notarized and witnessed across the board. Most states require the name of the attorney preparing the document to appear on the document. A few states require the property tax parcel number to appear on the deed.
Propy developed a legal workaround to allow transactions to be completed at cryptocurrency speed. Here are the steps: George owns a 10 bedroom home in Key West. He is actively investing in cryptocurrency and wants to use it when selling his house. To do this, he transfers ownership of the property to an LLC (after meeting the requirements above). The LLC then owns the NFT. The NFT is put up for auction. Buyers are asked to review the property and legal documents before the auction. Once the auction winner has been determined and the winner's identity has been verified, ownership of the LLC is transferred. George receives the cryptocurrency payment in his digital wallet. Easy.
Day Trading Homes is Stupid, but Liquidity is Key
Buyers can't resell real estate NFTs like they can digital pop art or Pulp Fiction script images. Propy's workaround still involves real-world homework, but it can shave days off by digitizing the process. That speeds up sales.
This means more liquidity. Real estate NFTs have the potential to broaden market reach, which also means more liquidity. Liquidity has value.
From a home buying or selling perspective, this liquidity can create opportunities to make or save money in the short term. For example, if home prices in a city or region are rising or expected to rise sharply,
Gentrification and new jobs. Maybe an architectural style becomes popular. Or the owner relocates to a new city for work and needs to sell quickly. Or maybe a celebrity moves into the neighborhood.
Blockchain, cryptocurrencies, and NFTs are expanding business and legal boundaries in the fintech industry. Real estate NFTs probably won't be a high-flying, high-return asset class. But oddly enough,
As long as this new cryptocurrency world holds up, real estate NFTs may be a reasonable and reasonable hedge.