Real Estate NFTs, cryptocurrency, blockchains. No, this isn’t some futuristic, far-off concept. It’s real and it’s happening today. But, when it comes to real estate, are there true advantages or is this all just a novelty? And what exactly is a Real Estate NFT?
NFTs are unique digital tokens purchased with cryptocurrency and are most commonly used to buy/sell digital assets like digital art and music. NFTs grant sole ownership of a digital asset and that ownership can then be publicly tracked and easily sold.
When it comes to Real Estate NFTs, these are used to buy/sell physical assets, such as real property. For example, a developer in Portugal recently sold two luxury homes for a type of cryptocurrency and made the ownership of the homes available via NFT, which would allow the new owners to resell the properties digitally.
The selling point of NFTs is the ability to buy/sell quickly with the “click of a button”. But when you peel away that shiny new promise, it’s a bit more complicated on the back end. There are many important questions that emerge, like “how is title officially transferred?” or “what is the recording process and how will property taxes be calculated?”. What happens to all those important steps during the escrow process such as ensuring clear title, identifying any liens or defaults, conducting inspections, etc.
I think it’s safe to say that the ease and speed of this new digital world is attractive, but it will take some time for the other key steps in the buying/selling process to catch up.
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