A house in South Carolina has sold as a non-fungible token for $175,000. The deal took place through the NFT marketplace of Roofstock, the leading digital real estate investment platform for single-family rentals. The platform has partnered with Origin Protocol to tokenize real estate properties as NFTs, a process the company believes will save buyers and sellers a high percentage of fees.
The real estate investor who purchased the property, Adam Slipakoff, said he could “never imagine” purchasing a property with a simple click, rather than going through the cumbersome and intensive process typically associated with buying a property. Now, instead of waiting months to buy the property, the process took just a second.
Slipakoff bought the property with USDC, a stablecoin pegged to the U.S. dollar. It is this invention that Roofstock believes will make blockchain-based property buying more popular, as it shelters investments from the volatility of the cryptocurrency market. In the future, people will be able to take out USDC-loans, secured or unsecured, to purchase properties.
While this is not the first property to sell as an NFT, Roofstock brings with it a large amount of expertise and money that could speed up adoption of this new buying method. In March of 2022, it raised $240 million in Series E funding from SoftBank, Khosla Ventures, Lightspeed Venture Partners, and others.
Users can currently search the property at 149 Cottage Lake Way on OpenSea, where it comes equipped with metadata. The contract address is also public knowledge, along with the token type: ERC-721, an NFT standard. According to the item activity, the seller minted the NFT two months ago. Since then, it has undergone transfers to different wallets.
Real Estate a Promising Market for NFTs
Although tying real estate properties to NFTs is rare, it is becoming more common. In fact, in the past eight months, two properties have auctioned as NFTs. Here are both of those stories.
First, a five-bedroom house in Florida sold as an NFT for $653,000. The buyer bought the property using Ethereum cryptocurrency, and the entire process took place on the blockchain. Like in the story above, the managers of the property tied it to an LLC. When the buyer bought, they instantly received ownership.
Second, ONE Sotheby’s International Realty teamed up with Voxel Architects to auction a real-world Miami mansion as an NFT along with its The Sandbox metaverse counterpart. The mansion spans 11,000 square feet and includes seven bedrooms and nine bathrooms. ONE Sotheby has scheduled the auction for Q4 of 2022.
One of the concerns about using NFTs tied to real world property is the possibility of a scam. As some have said, “If you’re scammed out of a Bored Ape, you need to change your profile picture. If you’re scammed out of one of these NFTs, you need to move out.” The real estate world appears to be aware of this possibility, placing NFTs in multi-sig wallets to prevent theft.
Here at Rarity Sniper, we’ll keep our ears to the ground for further developments in the story.