NFT Home Sale Has 1,500 Bidders Lining Up

NFTs are homing in on a new multi-trillion dollar market: real estate

A Gulfport, Fla., four-bedroom home is hitting the market this week with a $650,000 starting price tag, and otherwise unremarkable listing in a red hot real estate market.

Or it would be, anyway, except for a crypto caveat: Buyers can purchase the home with Ethereum, receiving a property deed via an NFT — one of the first such instances to hit the US real estate market. Though it has become commonplace for listings to attract a number of bidders, some 1,500 people had registered for the auction by Tuesday. Talk about competition.

NFT sales reached $4 billion in December 2021, and real-world assets will soon represent a significant portion of that market.

The Florida home’s property rights will be minted as an NFT — signifying ownership on-chain — which cuts down on closing time. The NFT owner will then own the property via a limited liability company (LLC) that houses the NFT.

TechCrunch founder Michael Arrington sold his studio apartment in Ukraine last year for roughly $113,176 of ether at the time of publication.

The traditional real estate sale process is arduous and broken … It’s an opaque, dated, and unnecessarily lengthy process, full of risks such as wire fraud.

Blockchain can smooth the process of real-world property sales while also attracting younger investors to the real estate market.

Gen-Z and millennials can transact real estate very easily.

Tokenized real estate service only works if the home buyer owns enough ether to power the transaction — one obstacle for potential bidders. A potential solution to this is a lending option for real estate-backed NFTs.

Venture capitalist Tim Draper and the National Association of Realtors are two of the company’s backers.

Braden Perry, a former CFTC enforcement attorney, told Blockworks that real estate has a “huge upside potential” when it comes to NFTs and smart contracts, but the US regulatory environment “lags innovation” to support it.

“The real estate title process is ideally suited for streamlined and protected recordings on a blockchain,” Perry said. “But the regulatory system is still new, and there are a lot of questions regarding the government’s role in crypto.”