SOUTHWEST FLORIDA — It’s not just digital art, tweets, songs and memes selling as NFTs. A Florida home, located in Gulfport is the first in the United States to be auctioned as an NFT.
NFTs have quickly gained popularity. NFT stands for non-fungible token, which means it’s unique and can’t be replaced with something else the way a dollar bill, or even a unit of cryptocurrency, can.
Think of it as a digital trading card. NFTs aren’t the same as cryptocurrency, but they use the same blockchain technology that powers cryptocurrencies and you use cryptocurrency to buy and sell NFTs. In short, to do an NFT deal, both parties need to pay with cryptocurrency, and at this point you’ll likely need a lot of it.
So why would someone want to buy or sell their home this way? Real estate agents who are getting in on the hype said it can provide a quicker, more secure transaction and the ability to participate in decentralized finance.
At Haven Real Estate Group in Southwest Florida, agents Joey Remington and Katie Edmonds Peters are in the process of getting crypto-certified, which would give them the knowledge and license to sell homes using NFTs.
“We feel that cryptocurrency, NFTs, it’s not just the future but it’s starting now,” Edmonds Peters said.
They’ve been busy keeping up with the competitive real estate market and they consider this another tool to reach more buyers and sellers.
“This changes the way you transact. That’s it. You’re still buying the same thing, it just changes the way you purchase it,” Edmonds Peters said.
So no, we’re not talking about people buying virtual land in the metaverse (which is also happening). You’d be getting a real house in the real world and the NFT proving you’re the only one who owns it.
“The actual transfer of the property is an NFT, sold in the blockchain. That’s all the data. The NFT will be the deed. All of the transfer of the property is then held in the blockchain,” Edmonds Peters said.
In the Gulfport NFT-backed home sale, the company Propy hosted the online auction on Feb. 10 after turning the property rights into a digital token.
Home in Gulfport, Florida, auctioned as an NFT
“Specifically in that case, we put it into an LLC. We NFT the rights to that LLC, so basically you’re bidding on that company which owns the house,” said Adam Brown, Propy’s VP of Sales and Broker Relations. In a traditional sale, once your offer is accepted, there’s typically an inspection, an appraisal, tons of paperwork and time for the deal to fall through. “It becomes a 45-60 day process. From the buyer’s perspective when you NFT your home, you look at the house, if the auction is this Sunday at 8:00, you’re the winning bid, then you own that house this Sunday at 8:00,” Brown said. In their first NFT-backed home transaction, Propy said the inspection and appraisal happened before the auction. About 50 people went through the bidding process. By taking third parties such as lenders and title companies out of the equation at the time of the transaction, it’s not just quicker — Propy and other advocates said it can reduce the risk of wire fraud. That’s because of the way the blockchain stores data. “Definitely, fraud should be eliminated a little bit more, but you still have to be aware there are hackers in the cryptosphere,” Remington said. Remington and Edmonds Peters said there are some groups of people that will likely never get into NFTs and crypto. Bottom line there, traditional sales aren’t going away. They said this just brings a whole new group of buyers to the table. “It just brings people to the table that have invested early on. They have large amounts of cryptocurrency, they want to spend their money and invest,” Remington said. Brown said Propy is currently working on hundreds more NFT deals, some of which are in Florida. “We do see there will be a movement, particularly with these younger generations, that will be looking to transact in this way and we just need to make sure that we’re ready for that. We don’t want to look back and say wow we really missed out,” Edmonds Peters said. The Gulfport home was sold for 210 ethereum, or $654,000. It was last sold in 2020 for about $250,000. Realtors equate some of that huge increase to the NFT-nature of the deal, but also the competitive market. “The market’s up. We’ve seen a large increase in property value right now,” said Edmonds Peters. Since NFT and crypto sales change the home buying process, some wonder if it will take realtors out of the equation. Propy and Haven Group agree – the answer is no. They said you still need someone to attract buyers and sellers and track down that dream home. Plus, when navigating a new frontier you may need someone to explain how it all works. “I think going into cryptocurrency can be scary, so I think having someone that has done it before, who knows how to do the transaction, the seller or a buyer is going to want to work with an agent to make sure it’s done correctly,” Remington said. Remington and Edmonds Peters are still in the process of getting crypto-certified through Propy. They said it’s an online course that takes 12-15 hours. It’s important to note buying and trading cryptocurrency comes with a high-risk. Experts advise understanding the speculative nature and investing only small amounts if you’re getting started. When a large trading decision comes into play, that’s where a crypto-certified realtor can be crucial. “In my mind, it’s how do I protect my seller or my buyer or both,” said Amy Heckler the Program President of Heckler Realty group, which listed the Gulfport Home that sold in an NFT auction.
Propy expects the process to evolve in ways that are yet to be seen.
