Non-Fungible Tokens (NFTs) have taken the world by storm in a very short period of time. From record-breaking sales and being used as profile pictures on social media by celebrities and ordinary people, to real estate NFTs, it’s definitely the technology of the future.
When most people think of NFTs, they think of digital art and profile picture style collectibles, but NFTs are much more than that. Without thinking too much about what they are, you can see that the possibilities are endless and, more importantly, there is a role to play in every sector.
In its simplest terms, NFTs represent tokenized records on the blockchain. Due to the nature of blockchain, it is nearly impossible to alter or arbitrarily change these records. NFTs therefore represent ownership of an item, digital or real life. This means that anything can be turned into an NFT as long as a person can own it.
NFTs are developed for multiple uses on multiple platforms. Some are popular, while others are relatively well known. One sector where NFTs find use is the real estate sector. You would be surprised to learn that real estate NFTs have been a hot topic since 2017.
What is real estate NFT?
NFTs are recorded on the blockchain to help verify ownership and identity. Through them it will be possible to find the true owner of the asset and previous transactions on it. These features are applicable to instances of real estate NFTs.
Simply put, a real estate NFT is a record on the blockchain that indicates ownership of real estate. Real estate in this context is ownership of land, property, or interests. Houses and land can therefore be represented as NFTs. Makes it easier to check land and property details and past transactions. But that’s not all.
Virtual real estate vs. physical real estate NFTs?
The web3 wave brought many changes. One such change is the introduction of the metaverse. The Metaverse is like a virtual world where digital assets come to life. These virtual worlds have evolved with the rise of cryptocurrencies and NFTs. Therefore, companies like Meta have spent billions of dollars to create these virtual worlds.
In the metaverse you can also own properties. These are NFTs that you can own, just like physical real estate. An additional problem is that it exists in a metaverse that users can access, explore, and even develop.
Companies and brands are also exploring this space. Many businesses are building virtual replicas of their office spaces and stores in the metaverse. Users exploring these virtual stores have the same experience as those who visit the physical stores.
How will NFTs affect physical real estate?
NFTs are impacting every aspect of life, and real estate is no exception. It can be hard to wrap your head around the terminology and understand how it works, but the benefits are immense and revolutionary. Here are some aspects of physical real estate that NFTs will impact.
permanent record
A key feature of blockchain is a permanent record. This permanent record cannot be changed and is open to the public. In the context of real estate NFTs, they can be programmed to collect important information. For example, when you buy Rand NFT, the transaction is immediately recorded on the blockchain. Any prospect interested in the same land you own will have access to it. As well as all other relevant information, such as sale amounts, legal disputes, payments, actions, and other relevant information.
Fast and secure money transfer
Blockchain transactions are famous for their speed, security, and low fees. NFTs run on the same technology, so real estate transactions are done and secured in minutes. This differs from traditional transactional modes, which can take days, weeks, or even months to complete.
It also eliminates the high transaction fees typically required from intermediaries (financial institutions) to facilitate sales. In some cases, these hefty administrative fees may discourage parties from completing transactions. However, with NFTs, it is only between the buyer and the seller and there are no other intermediaries.
automatic contract
Using smart contracts with real estate NFTs will bring a whole new experience for users. A smart contract is a system within an NFT that dictates what to do and when. As a result, when you sell the NFT to another person, the smart contract will execute that transaction.
In the case of real estate, it may take time to reach an agreement. Perhaps for financial reasons or because you need to do other things. NFT smart contracts can be programmed to recognize this. Therefore, once the buyer or seller has fulfilled these obligations, the smart contract will trigger the sale to the buyer and send the purchase price to the seller.
partial ownership
Similar to traditional real estate practice, multiple individuals can jointly own a single property. This joint ownership is useful when many people want to pool their funds to buy a property. Or, if a property developer wants to raise money to complete a project, ask others to join in the funding.
In this case, the parties can easily secure shared ownership. Essentially, co-owners can create multiple tokens to represent the interests of all individuals pooling their money together. In addition to demonstrating ownership, it also helps secure rights, especially when funds are unequally combined.
In addition, parties to that partial ownership agreement can decide to sell their stake to another person. In such event, the purchaser will inherit the shares of the seller and all other rights that person may have. More importantly, no one other than the recipient has control over that shared token.
Where can I buy real estate NFTs?
Many platforms offer the opportunity to purchase real estate NFTs. Here are some of them:
- Decentraland
- Polka City
- super world
- voxel
- Upland
- somnium space
- sandbox
- Omni PSI
- fraction
- Propy
- Real T
- vesta stocks
- bonfire city
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*All investment/financial opinions expressed by NFT PLAZA are based on the personal research and experience of the site moderators and are intended for educational material only. , the product should be thoroughly investigated.
A blockchain maximalist who believes the future we are heading for requires technology. An avid researcher and writer who uses his writings to inform the prospects of his blockchain space.