In early February of this year, Leslie Alessandra sold her home in Gulfport, Florida for $654,310. This sale made real estate history as the first home sold as an NFT (Non-Fungible Token) on a blockchain in the United States.
The house and other real estate, which has since been sold as NFTs and paid for with cryptocurrencies, herald dramatic changes coming to the real estate industry. Like other assets that have been tokenized as NFTs on the blockchain — art, subscriptions, carbon credits, and more — real estate NFTs are gaining traction because they solve real problems, such as process efficiency and proof of ownership transparency.
Optimizing Real Estate Transactions Using NFTs
Selling a home has traditionally been a lengthy, cumbersome, and expensive process. From the initial listing of a home to the final closing of an offline real estate transaction, it can take weeks or months. Requesting and negotiating proposals, verifying title and ownership, and completing the necessary contracts and paperwork all require additional time and expense.
Home tokenization in the form of NFTs brings powerful benefits to both businesses and consumers, including clear digital ownership that is irrefutably and permanently embedded on the blockchain for all to see. Interested buyers should be able to quickly and easily view previous owners, tax records, pricing history and any legal disputes related to the property. For real estate agencies and property management companies, NFTs can also be easier and more widely sold. In the case of Alessandra’s home in Gulfport, the auction drew about 3,000 bidders.
In addition, real estate NFTs help streamline or replace slow and expensive third-party processes such as title insurance and escrow. And, as with other NFTs, the actual transfer of property and funds can be completed safely and almost instantly, without all the paperwork and reverse nature of the traditional closing process.
Real estate NFTs also offer intriguing opportunities beyond traditional one-on-one home sales. For example, an NFT may represent a contractual obligation of the homeowner to pay a title fee or HOA/contract. Owning through an NFT can even make it easier and faster to get a home secured loan, bypassing much of the extensive due diligence and documentation required by traditional financial institutions for a mortgage or line of credit.
Real estate NFTs on the XRP ledger
The real estate world can be complex and anyone who has bought, sold and/or rented a home knows that it can be an extremely tedious process, especially for those of us who are not good with jargon and other subtleties. and exits from the industry.
In an effort to simplify the process of buying, selling and renting a home, ProprHome, a Ripple partner, will use XPR Ledger to create and distribute NFTs that will represent ownership. The company uses the speed and reliability of XRPL to increase trust and efficiency in the Portuguese real estate market. ProprHome also runs a robust NFT and real estate literacy program to help new users understand and maximize their experience.
And since Portugal has the highest concentration of real estate agents in Europe, ProprHome will help market participants find the best by issuing reputation currency, which can be earned for good practices and then redeemed or exchanged for advertising and additional advertising.
XRPL: built specifically for NFTs
Companies like ProprHome are turning to XRPL as a fast, low-cost, and secure public blockchain because it is ideal for settling NFTs and other tokenized assets on a large scale.
NFT transactions on XRPL close in less than five seconds, cost just pennies, and eliminate the need for complex smart contracts. XRPL can also handle large transaction volumes, and key NFT functions such as creation, burning, and trading are pre-programmed as native functions in the ledger, making it user-friendly and well-suited for large real estate firms or governments.
The inherent benefits of XRPL are enhanced by the continued support of utility-based Ripple NFTs. With our $250 million Creator Fund to develop new NFT use cases, we are excited to see what the future holds for functional NFTs, from real estate and carbon markets to media and entertainment and beyond.
To learn more about NFT support on the XRP registry, visit XRPL.org.
Want to start minting your own NFTs on XRPL? Applications are currently being accepted for Wave 3 for the Ripple Creator Fund. Find out more and apply today.