(ETX Daily Up) – NFTs aren’t just for the arts or fashion industries. These non-fungible tokens are also beginning to disrupt real estate. Proof with the sale of a $4 million home in the United States, on the way to becoming the most expensive real estate ever sold in the form of an NFT.
Real properties as NFTs? We already knew about the rise of virtual real estate in the metaverse. From now on, it’s the purchases of real estate through non-fungible tokens that are popping up. Last February, the NFT of a Florida home sold at auction for $653,000. And that’s just the beginning, say American real estate specialists.
This idea may seem absurd, but there are more and more tour operators offering these new types of offers in the United States. Dave Wilkes, a real estate developer in Utah, is currently building a luxury home in the town of Millcreek. This 800 m2 residence will include a spa, sauna, roof terrace and swimming pool. In order to afford this property (and therefore this NFT), potential buyers will have to pay no less than $4 million in cryptocurrency. The home could become the most expensive physical property ever sold in NFT.
Prospective buyers of the Millcreek villa will become actual and official owners of the property. “Everything about the home – the property, the design of the home, the plans, the architecture, you know, all the work that has been done on the home is factored into the NFT transaction with the buyer,” explains David Wilkes UtahBusiness. This NFT will also include physical art already present in the house and virtual works. According to him, it will be possible to use this house and even resell it digitally without having to go through the property sale process such as the title deed.
Towards a property revolution?
Does this seem impossible or simply unthinkable? It should be forgotten that the blockchain has extremely interesting properties for the real estate industry. Similar to buying an NFT, each token is managed by what is known as a publicly visible smart contract. These contracts are actually quasi-automatic computer protocols that facilitate, verify, and execute the terms of the contract.
As part of this Utah home, it is an LLC that will actually hold the title and its capital. However, since the non-fungible token is unique, its owner has exclusive use of the property. However, currently these smart contracts are not legally enforceable and neither France nor the European Union have ruled on their use. They could represent some sort of legal agreement in the future as various talks are held to create a legal framework for these new contracts.
But all this, for what purpose? In a traditional real estate transaction, third party intervention can increase costs for both buyers and sellers. The main goal of these homes, in the form of a non-fungible token, is to make home ownership easier by creating new opportunities for speed and transparency.
While housing is always more expensive, for David Wilkes, the use of blockchain in real estate could allow less fortunate buyers to build fortunes. For example, by accessing partial ownership of different apartments. “I’m confident that there will be many different types of condominium ownership structures in the future,” he tells Utah Business. “I think the way future generations will own and live in houses will be very different from what has been done in the last 100 years.”